Reply #53: A couple points - 1st, Are you aware there is an Economics Forum on DU?

[A HERETIC I AM]

Here is a link to the Economics Forum. There is also a Personal Finance & Investing Group


Your first question is a bit misleading and not entirely accurate.

Question:
How bad is the economy?

Answer:
Bad. If you will look at the Dow Jones Industrial Average, you will see that since Bush took office, the DJIA has risen (in dollars, not real, inflated dollars) under 9%, or a little over 1% per year. This is pathetic, even if there were no inflation and no diminution in the value of the US dollar.

What this means is that you if you invested $1000 in the DJIA, on average, on January 20, 2001, the day Bush took office, and let it ride for 7 years, you would now have $1090 to show for it in value.

If you had invested your $1000 in something really safe, like tax free bonds, paying maybe 5% per annum, you would have over $1350 in value now, and in fact, given your ability to reinvest the the $50 it was throwing you each year, you'd have closer to $1400. When really safe bonds are outperforming the stock market that badly, the economy is really bad.

While your sentiment is in the right place, your numbers are not accurate. You neglect to mention that the 30 stocks in the Dow all pay dividends and they average 2.9% If you are going to include reinvesting interest on Bonds, you should include reinvesting dividends. You would find the total return of the DOW 30 is considerably higher than 1% per year.



One last question; How the hell does someone put up 2680 posts in 19 days?