Because if consumers do the "right thing" and stop piling crap, the economy will shrink, by prob 20 %. 401k FAIL SS FAIL or the economy fails. We need a couple of idiots who believe stocks always go up, so that some of us can make money when they go down. evolution will deal with the rest (extinction of the weakest)
So the dems take my money and put it into gov't bonds? Are you fucking kidding me? OH YES, Lets give the gov't more money to waste while they build up yet another HUGE future obligation that they can't pay. Who said this was a good idea? You should be shot. I'll take the risk you asshoppers, stay the hell away from my 401k. WTF! I thought traders were freedom loving folks.
Let me say, that my investment (not trading) accounts are only about 50% in stocks. I went 50% bonds last year and I'm down about 5% for the year, so not too bad from an investment standpoint. But to think that you're better off with the goverment stealing your money to go into treasuries at 3%/yr, is madness. This is just one more way for them to get their hands on our money. How long do you think it would take before they started reaching into the "trust fund"? I'll take an average of 10% (plus company match so effectively 15%) all day long over 3% and having the government piss away the money so that it has to inflate just to pay off my debt obligation.
I guess abstract thinking is not your strong suit. There are many reasons that contributed to the robust growth of the US stock market during 20th century and those are the precise reasons why it is highly unlikely to repeat in the 21st century. I already outlined macroeconomic reasons but there are also revolutions in the way people trade (electronically and virtually instantenously), the size (no more discrimination of odd vs even lots), the price structure (the boom in discount brokerage) and the general level of interest and participation in the markets (virtually half of US households are invested in the markets one way or the other) Coupled with 401(K) &Mutual Funds pumping dumb money into the stock market and you get some robust growth. All of it creates plenty of money making opportunities for people around the markets (old adage of selling shovels instead of digging for gold) and for a tiny slice of people who know what they are doing. The jig won't last forever though. At some point people will realize 401(K) is a scam.
Excellent HONEST analysis. and if you noticed last week, I've heard Maria Bartiromo at least TWICE reporting that people are telling her they aren't making any money in the SM, over a 10 years horizon. Hardly traders. The buy & hold crowd are about to take notice of the scam. and move out. 401k is scam Buy & hold is a scam Talking heads bullshitting about a one in a lifetime opportunity to buy on the dips SCAM I make money when it goes up, down and in between. but to assert that the stock market is a good investment long term is a big fat lie, you're better off with municipal bonds.
A 100 year chart might help show the immutable upward drift of the stock market. <a href="http://smg.photobucket.com/albums/v65/nokomisjeff/?action=view¤t=100_year_dow_bull_bear_periods.jpg" target="_blank"><img src="http://img.photobucket.com/albums/v65/nokomisjeff/100_year_dow_bull_bear_periods.jpg" border="0" alt="Photobucket"></a>
Well, my naive friend, you better then get out quick while your ass is still intact because there will come a time when we will all be drowning in a sea of monster inflation.
Yes, at which time, I will get out of bonds and primarily into stocks and real estate. Tell me again, how inflation would help make this rediculous plan better. That is the arguement at hand. A 3% return along with "monster inflation" would be a disaster for your money. At least with stocks, "monster inflation" would lead to increased stock and real estate values.
How is a 401k a scam??? Even if you invest all of it in bonds at 3% you still should get an average match of 100% up to 6% contribution. I realize some plans dont match at all, BUT ITS STILL YOUR MONEY. Once the gov't gets it who knows what will happen. You also get a dollar for dollar reduction on your gross salary. The government idea is horrible. They are obviously looking at ways to fund the social security squeeze that the boomers will cause. How about limiting SS benefits to those who really need them and a reduction of benefits to those who have good pension plans in place.