The Wall Street Thrill Ride
The last few weeks have been the worst kind of roller coaster for an investor with money in the stock market. Wall Street is seeing several factors influence trading and none of them are good. Debt crises are spreading across Europe, political dysfunction seems to be reaching new lows in Washington and the first ever downgrade of U.S. credit created what one analyst called “a perfect storm of selling.” The effects have been dramatic and painful. Nearly 2.1 trillion dollars of capital have vanished as the market has shed nearly 15% of its value in the last month.* There are a lot of words that could describe the stock market right now, and “perfect” is probably not the first choice for many investors.
Sadly, this market volatility is nothing new, but it has gotten to the point that market observers need to take Dramamine before the bell rings. While some asset classes will suffer through volatility to get great returns, the stock market can make no such claims. The Dow Jones is trading at the same levels it did in 1999. NASDAQ is doing no better and is at nearly 50% off all time highs that were reached 11 years ago. Looking at these numbers, the Wall Street mantra that the U.S. stock market is the best vehicle for equity growth fails under any level of scrutiny.