For the past month or two I have been riveted by the stock market. Then I got to thinking about what a big change that is.
In the 1920, hardly anyone invested in the stock market. Retirement meant savings, family or poverty. There was so much poverty we created the social security administration.
Over the years it has gotten easier and easier to invest in the stock and bond markets. Since 1990, it seems like EVERYONE has a broker and a portfolio and an IRA account. For decades, most people got a pension from their employer and a little extra for social security. Now it seems that everyone is on their own and "investing in the market" is something everyone is expected to do.
Take a moment and think about what a huge change that is over a generation.
With every asset class falling at the same time around the world, take a moment to think about whether it is a good idea for everyone's retirement to depend on the stock market.
I thought I had a good grasp of investing before this crash but I have learned a ton in the past month. I cant imagine what the average person knows or thinks about the stock market. Very few people I talk with have any idea what they are doing.
By pushing millions of people into the market, we have created a huge supply of "greater fools". Is it realistic to think that the "market" can sustain the retirement needs of everyone?
By expecting people to take care of their own retirement by investing in the market, we may well be recreating the crisis of senior poverty that social security tried to eliminate nearly a century ago.
