Did it? I really can’t wrap my head around trying to reconcile what the people who know about this stuff say and what the numbers on page seem to say. I’m just not smart enough. I know I’m not the brightest bulb in the box, but I’ve been trying to figure out the real impact of all this on the market and it honestly seems to be really minimal. Yes, it’s trending down and recession seems likely and a couple days had really big drops this month - but it’s nowhere near even its average, never mind its lows from the past 2 or 3 year periods. Just 3 years ago the market was at like 28,000 points. It doubled in 3 years and now that its shrinking a bit, that is a crisis? What do I not get?
This isn’t so much the market “plummeting” as it looks like to me a massive bubble bursting that was based on nothing to begin with.
But then, I’m the guy who thinks “The Big Short” was a smart movie. I’ll freely admit I’m a fucking moron who knows nothing about finance.
So I may have misspoke, and, I am also not smart enough to understand all of this, but I do understand one thing. Investments that track the stock market are supposed to grow. Usually about 7% a year. I invested in index funds back in september, at one point I saw it up by ~5% but now my balance is back down to ~2% from initial investment. At this point I would expect to reasonably be between those numbers. Given the instability we keep seeing, I’m not expecting nearly the ~7% growth per year that is normally a rule of thumb :'(
Ah ha - I see, we’re talked over each other a bit but I think I get it now. You have to adjust for the assumed 7% in growth that would be considered “standard”. We’re not really at -2%, because we should be aiming for +7% at minimum. Which means the short fall is more than 4 times what it appears to be to my layman ass. I think I get it.
Right yeah basically. From September we probably ought to be at a 3% - 4% gain but I’m personally down to a 2% gain. At one point it was down to like 1%. It’s super easy for me to check because I invested a multiple of 10 and haven’t touched it since.
What’s really concerning is the speed of loss. It’s hot garbage.
You aren’t right about this. Surely you can read a line graph… I have index funds that closely track the market as a whole and they are way down compared to even before the election.
Right, and I can see that. But if you back out that line graph over a longer period of time, this dip would be miniscule compared to the overall upward trajectory. If the Y Axis tracking the market starts at 0 (which it wouldn’t I get that, but go with me here) and the X axis tracks time and we set it to say, a 3 year period - then the result is that the line has exploded upwards. The tiny tip at the end which represents the last 6 months barely registers. The average closing price in 2023 was 34,121. The close today was 42,454. So even if the market has dropped significantly in the last few months - it’s 25% higher than it was 2 years ago.
Again, I trust that people know what they’re talking about. I am certain I do NOT know what I’m talking about. I am not saying I don’t believe them, or that I’m right - I just want someone to explain the factor I’m missing. I have theories, but no way to confirm them because I lack the base knowledge to even phrase the question right.
Is the stock market supposed to have a “default growth” element that we have to account for? Like, is the fact that the market twice as high as it was 3 years ago an illusion because constant growth is just a necessary element of the market functioning at all? Does that default growth make longer timelines less useful as comparative tools?
Or is it that more that the market was projected to grow and then shrunk instead, so the relevant comparison isn’t to history, but to projections, which is why even a small dip seems more catastrophic? Because it was supposed to continue skyrocketing.
Or am I asking the impossible? Does gaining context for the larger momentum of the stock market take a degree in finance and by asking for someone for a simple explanation I’m just further showing my ignorance?
The way I interpret that graph of the last 5 years is that at only a couple of points in time did any drops as steep or as large occur except during covid times (exacerbated hugely by Trump) and once in 2023 which I’m not sure what happened but it was a slower fall and the recovery was very strong.
Then funny enough I stumbled on this image (I had saved from a couple weeks ago) when I took this screenshot to show you:
I don’t find it fair to say it only is significant because it’s not visible on a 90 year graph. Times change a lot over decades. Even if you only look at 20 years back, this is a blip you can see and it’s only a couple months in.
Gee I wonder why the stock market just plunged again
Did it? I really can’t wrap my head around trying to reconcile what the people who know about this stuff say and what the numbers on page seem to say. I’m just not smart enough. I know I’m not the brightest bulb in the box, but I’ve been trying to figure out the real impact of all this on the market and it honestly seems to be really minimal. Yes, it’s trending down and recession seems likely and a couple days had really big drops this month - but it’s nowhere near even its average, never mind its lows from the past 2 or 3 year periods. Just 3 years ago the market was at like 28,000 points. It doubled in 3 years and now that its shrinking a bit, that is a crisis? What do I not get?
This isn’t so much the market “plummeting” as it looks like to me a massive bubble bursting that was based on nothing to begin with.
But then, I’m the guy who thinks “The Big Short” was a smart movie. I’ll freely admit I’m a fucking moron who knows nothing about finance.
So I may have misspoke, and, I am also not smart enough to understand all of this, but I do understand one thing. Investments that track the stock market are supposed to grow. Usually about 7% a year. I invested in index funds back in september, at one point I saw it up by ~5% but now my balance is back down to ~2% from initial investment. At this point I would expect to reasonably be between those numbers. Given the instability we keep seeing, I’m not expecting nearly the ~7% growth per year that is normally a rule of thumb :'(
Ah ha - I see, we’re talked over each other a bit but I think I get it now. You have to adjust for the assumed 7% in growth that would be considered “standard”. We’re not really at -2%, because we should be aiming for +7% at minimum. Which means the short fall is more than 4 times what it appears to be to my layman ass. I think I get it.
https://www.cnn.com/2025/03/28/investing/us-stocks-tariff-uncertainty-volatility/index.html
Right yeah basically. From September we probably ought to be at a 3% - 4% gain but I’m personally down to a 2% gain. At one point it was down to like 1%. It’s super easy for me to check because I invested a multiple of 10 and haven’t touched it since.
What’s really concerning is the speed of loss. It’s hot garbage.
You aren’t right about this. Surely you can read a line graph… I have index funds that closely track the market as a whole and they are way down compared to even before the election.
Right, and I can see that. But if you back out that line graph over a longer period of time, this dip would be miniscule compared to the overall upward trajectory. If the Y Axis tracking the market starts at 0 (which it wouldn’t I get that, but go with me here) and the X axis tracks time and we set it to say, a 3 year period - then the result is that the line has exploded upwards. The tiny tip at the end which represents the last 6 months barely registers. The average closing price in 2023 was 34,121. The close today was 42,454. So even if the market has dropped significantly in the last few months - it’s 25% higher than it was 2 years ago.
Again, I trust that people know what they’re talking about. I am certain I do NOT know what I’m talking about. I am not saying I don’t believe them, or that I’m right - I just want someone to explain the factor I’m missing. I have theories, but no way to confirm them because I lack the base knowledge to even phrase the question right.
Is the stock market supposed to have a “default growth” element that we have to account for? Like, is the fact that the market twice as high as it was 3 years ago an illusion because constant growth is just a necessary element of the market functioning at all? Does that default growth make longer timelines less useful as comparative tools?
Or is it that more that the market was projected to grow and then shrunk instead, so the relevant comparison isn’t to history, but to projections, which is why even a small dip seems more catastrophic? Because it was supposed to continue skyrocketing.
Or am I asking the impossible? Does gaining context for the larger momentum of the stock market take a degree in finance and by asking for someone for a simple explanation I’m just further showing my ignorance?
The funny part about this is that I feel even more validated when I check a live updates graph of the s and p 500.
See for yourself: https://www.macrotrends.net/2488/sp500-10-year-daily-chart
The way I interpret that graph of the last 5 years is that at only a couple of points in time did any drops as steep or as large occur except during covid times (exacerbated hugely by Trump) and once in 2023 which I’m not sure what happened but it was a slower fall and the recovery was very strong.
Then funny enough I stumbled on this image (I had saved from a couple weeks ago) when I took this screenshot to show you:
I don’t find it fair to say it only is significant because it’s not visible on a 90 year graph. Times change a lot over decades. Even if you only look at 20 years back, this is a blip you can see and it’s only a couple months in.
https://www.macrotrends.net/2324/sp-500-historical-chart-data
If you look at this data and don’t see it, I don’t know what to tell you.