S&P 500 tops 2,000 for first time ever

[Nye Bevan]

Source: CNN

So much for the stock market rally coming to a screeching halt. The S&P 500 surpassed the 2,000 level for the first time ever on Monday morning.

Despite a fair amount of ups and downs over the past few months, the popular index of large companies is up 8% this year. And that follows a nearly 30% surge in 2013.

If you've had your money in the market since 2009, you're likely very happy -- and a lot richer. The S&P 500 is now up more than 200% since this bull market began in March 2009. Many people invest in retirement funds that mimic the S&P 500.

Why stocks are up: You can thank Europe for this latest surge. Comments from the head of the European Central Bank on Friday are driving today's action. Mario Draghi, speaking at conference hosted by the Federal Reserve in Wyoming, hinted that the ECB may do more to stimulate the struggling European economy if deflation gets worse. In other words, the Band-aid is ready.

Read more: http://money.cnn.com/2014/08/25/investing/sp-500-2000/index.html?iid=mkt_SF_news

[EEO]

1. And the middle class is no better for it.

[Nye Bevan]

2. "55% of those who earn between $30,000 and $75,000 per year are invested in the stock market"

http://wallstcheatsheet.com/stocks/how-many-americans-even-own-stocks.html/?a=viewall

so I am not sure that your claim is accurate.

[jtuck004]

5. Economic recovery favors the more-affluent who own stocks

By Alec Tyson4 comments

The surge in the stock market this year – restoring much of the wealth that had been lost during the financial meltdown that struck in 2007 – has masked the unevenness of the recovery among Americans since 2009. A Federal Reserve board analysis this week spelled out the reason: stock market wealth is held by a relatively small number of the most-affluent and, as a result, “most families have recovered much less than the average amount.”

FT_Money_MarketThis factor is also made clear in Pew Research Center surveys and analyses that show which Americans do or don’t own stocks, and how this dividing line has widened the wealth gap in the period since the recovery began to take hold in 2009.

A Pew Research survey in March found that 53% of Americans say they have no money at all invested in the stock market, including retirement accounts.

http://www.pewresearch.org/fact-tank/2013/05/31/stocks-and-the-recovery-majority-of-americans-not-invested-in-the-market/

The number of people invested hasn't been this low in years, and millions have had to empty these accounts trying to survive in this Banker's economy..

[BlueMTexpat]

3. Anyone in the middle class who has a job with

retirement benefits most certainly is! Pension funds are among the biggest Wall Street investors. If you contribute to a pension fund or a 401K, check out where your money is invested by the fund managers.

I am not sure where your comment is coming from.

If you do not have a job with retirement benefits, you most likely are not in the so-called middle class.

[IronLionZion]

6. It's a reaction to good news in jobs, housing, consumption

consumer confidence, and other factors. Stocks are also how public companies get funding to hire more workers or invest in new equipment. A higher stock market also enables workers to retire which opens up more jobs for others.

Good luck getting any jobs or minimum wage bills through the GOP house, let alone any more social reforms or amendments to existing laws.

[jtuck004]

4. And this administration will leave more people in poverty than there were in 1960, most of whom

were not in poverty when it started, and will never come out of it. Now about 50 million. You can blame someone else for the cause, but the fact that it hasn't improved is laid square at the feet of this administration. In writing.

I remember W praising someone for this kind of effort with "Good work, Brownie!", 'cause he some shiny things amid the devastation.

Maybe that's what happens when we hire millionaires to sit around in the White House, work on their book contracts and speeches and schmooze with bankers instead of advocating on behalf of working people.

And anyone who doesn't like it can feel free to read Tim McVeigh's book, I mean Geithner (I get my killers mixed up) wherein the former Treasury Secretary lays out that this IS the plan, deliberately keeping bankers wealthy and letting others suffer.

http://ecx.images-amazon.com/images/I/51Wf5rheD1L._SY344_BO1,204,203,200_.jpg
http://www.amazon.com/Stress-Test-Reflections-Financial-Crises/dp/0804138591

Here's an excerpt from the Daily Show in which voters laugh in Geithner's stupid face for telling them that this IS the plan.

Feeling screwed? It's by design.

[Aristus]

7. This leftist-communist-marxist-socialism SUCKS!

Thanks, President Obama!

[progree]

8. Wasn't the S&P 500 at 850 when Obama took office? (spoiler alert: yes)

(850 was the last close of the S&P 500 before inauguration day).

So at today's 1997 close, it is up by a factor of 1997/850 = 2.35 times. Hmm.

http://finance.yahoo.com/q/hp?s=%5EGSPC+Historical+Prices

[progree]

9. Has Vanguard's S&P 500 index fund gone up 53 fold since its 1976 inception? (spoiler alert: yes)

And has it, on average, doubled every 6.62 years? (spoiler alert: yes)

http://www.thestreet.com/quote/VFINX.html

Since inception 8/31/76: 11.03% average annualized total return, last update: 8/22/14

So in the 37.974 years between 8/31/76 and 8/22/14, the S&P 500 has had a 11.03% average annualized return

Which means it grew by 1.1103^37.974 = 53.16 fold ("^" is exponentiation)

Meaning $20,000 invested in the fund back then would be $1.063 MILLION now

Something that grows at the rate of 11.03%/year average doubles on average every 6.62 years: 1.1103^6.62 = 2

Note, this isn't some "hot" cherry-picked mutual fund. It is a plain vanilla index fund that follows the S&P 500 Index as close as it feasibly can. I only pick it because it is the oldest such fund I know of. And because investing in an S&P 500 index is the "default" choice for one's core equity investment recommended by most financial advisers and financial pundits, at least from what I've seen and read.

A small cap index fund or a value index fund would have done even better during this period.

Nor is this the return only an insider would get. Nor is this some theoretical return before expenses. The fund's returns are net after expenses. This is the return a Joe/Jane Sixpack would have achieved if he/she had put money in at inception and left it alone (with dividends and capital gains distributions reinvested).

Well, except for taxes. Unless invested in a Roth IRA (which is tax-free, but that didn't exist back then). Or in a Traditional IRA in some cases.

[progree]

10. Reminder: "The Death Of Equities", Business Week, 8/13/1979 (famous cover story)

(this just 3 years before the greatest multi-decade bull market in U.S. history began)

http://www.businessweek.com/investor/content/mar2009/pi20090310_263462.htm





This graph was made in early 2005 when the Dow was around 11,000. Now it's around 17,000 (when the "Death of Equities" story came out, the Dow was under 800)

?w=640

[Kennah]

11. Es gut ta be da king, no?

Sucks to be the piss boy