Five Things Podcast, The Transcript: Hyperinflation vs. Deflation Kevin Depew Oct 24, 2008 4:10 pm |
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Kevin Depew: Well, I wanted to bring this up because I think it might be shocking to a lot of people, because we’re told over and over again that stocks for the long term are what we’re supposed to be focused on.
Well, over the past 8 years, the S&P 500, including dividends, has actually lost 26%. So that means if you put $100 away on
Meanwhile, over that same period, cash is up over 31%. And the proxy for cash would be the three-month Treasury bill, which is almost the safest place to park your cash, except for under a mattress. Only, in this case, a mattress doesn’t pay you anything, and the Treasury bill does.
Cory Bortnicker: Right.
Kevin Depew: But that’s up 31%.
So to me, this shows us that we’ve been in a bear market for eight years now. And when you have days like we had today, with the DOW down another 500 points, it’s sort of hammering that home that, hey, this bear has not gone away.
Cory Bortnicker: Right.
Kevin Depew: And I think that it’s probably going to be another four or maybe six years before we get to a point where stocks are going to be attractive as investments again.
Cory Bortnicker: So given that, I mean, why should I or anyone invest as opposed to just saving? What is the difference between saving and investing?
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