Investors, Savers Between a Rock & a Hard Place

I have no idea where the stock market is headed from here (and neither does anyone else).

But, in the event that it suffers a sharp break — possibly in connection with the playing out of central bank stimuli — I have no doubt what at least some people will say: “anyone I told youwho lost money on stocks got what they deserved.”

No doubt served up with a healthy dose of moralistic judgment.

Tuesday Morning Quarterbacking

Once upon a time, such a sentiment would have been (more) appropriate.

But, that was before the Federal Reserve basically gave savers and investors a choice between earning nothing on their capital — in fact, seeing their capital slowly erode due to inflation — and chancing it in the “risky” stock market.

The conundrum echoes the dilemma prospective home Buyers faced roughly between 2004 – 2007.

For every homeowner who “recklessly” overextended themselves, buying a home beyond their means, I’m personally aware of another 4-5 (or 10!), who plunked down a healthy downpayment, bought responsibly — and still got bit by the unprecedented housing bear market that followed.

At least, that’s what I observed in Minnesota (I can’t speak to Southern California, Florida, etc.).

P.S.: ┬áThe only thing more predictable than a chorus of “I Told You So’s” after a major market downturn?

A spate of stories — after the fact — about savvy investors who “knew” the market was overpriced, and took their profits just before the drop.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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