I’m seeing a-lot of comparisons going on to the bubble in 1999 with the crazy valuations going on. Furthermore, I see the same things like 08-09 was the last time we had a serious correction and increasing Covid cases with the weakening dollar could be the catalyst blah blah blah. Who the hell cares? This fear mongering of what might happen tomorrow is some shit i’m tryna leave behind in 2020. The bigger picture here is that our very landscape has changed in the last 2 decades and we have to stop being scared of change and fear of a correction. Can it happen? Sure, in fact it probably should happen but will that change anything in the long term? No. Here’s a few differences between our very economy now versus what it was like 10-20 years ago…
We live in a day and age where more people have access to investing in our history with zero commission trading fees and apps like robinhood, acorns, or betterment that appeal appeal to the beginner investor. The result is that the younger and younger generations are becoming more involved in the investment sector of the economy. Coupled with the fact that a large part of these young investors Millenials and Gen Z, do not own a home and/or live with their parents they have more freedom to put their disposable income into the market. What’s interesting is that millennials are actually one of the most cynical generations towards the stock market mostly because we have lived through two major recessions in recent times and have a large distrust placed in large financial institutions. This seems to have fundamentally changed proportion of americans who are benefitting from the stock markets bull run from an individual standpoint. However, with the rise of 401(k) benefits offered by employers and expansion of these plans, millennials are shifting more disposable income towards these options as opposed to self directed or individual plans which tells a different story.
We live in a day and age where new financial instruments and investing options are dominating the market popularity. The historic rise of ETFs approx +6,000 since 2009 have ushered in a new era of low cost diversification for the average investor. Employers are increasing 401(k) benefits and company match policies allowing for large capital accumulation among younger investors who are reaping the benefits. The rise of cryptocurrency has brought in an entirely new method to invest in the future which is particularly attractive to the younger generations who have lived through the technology era and have seen what investments in the future can look like.
We live in a day and age where we are exchanging information at the blink of an eye with a simple google search. Trend identification and data analysis in this day and age is easily accessible and a powerful tool to the average investor. Things such as cloud computing, AI, Genomics, blockchain, green/renewable energy are changing the foundation of our future and these ideas aren’t going away anytime soon. Access to social media, blogs, investment forums have never been easier and will continue to advance our general education and understanding.
Who knows what the next 10, 20, or even 50 years will bring? I don’t know but i’m certain that change is here to stay so stop worrying and embrace the unknown.
While I do agree with you in the fact that some of these company valuations are insane and this bull market cannot be seen as sustainable in the short run I think it’s important to weigh those concerns with the macroeconomic factors that have changed the investment landscape in the last 10-20 years. You should have a healthy dose of skepticism otherwise you will be caught off guard but you should also take into account the investing world is evolving and traditional metrics and guidelines in which investors have traditionally based their investment decisions on needs to adapt with it. What remains true is that not all great things can last forever and a healthy correction is brewing in the future and trying to time it is, and always will be, the worst mistake you can make. DCA into your positions has and always will be no matter what the best way to invest.
Who knows what the investment landscape will look like in 10-50 years? Creative destruction in our world knows no bounds and we are constantly advancing toward it. Change is brought on by optimism and in a 2020 lacking that – heres to a forward looking future built on the backs of bulls!
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence or consult your financial professional before making any investment decision.