Why Stock Investors Should Be Especially Thankful
Stock-Markets / Stock Markets 2014 Nov 26, 2014 - 02:24 PM GMTBy: Investment_U
Alexander Green writes: In my last column, I wrote about how life today is getting objectively better yet polls show we fail to recognize it.
Two-thirds of Americans believe the country is on the wrong track, a number that has hardly shifted in the last three years.
But take a closer look. We enjoy economic, political and religious freedoms denied to millions down through history and around the world today. Life expectancy is increasing. Standards of living are rising. Technology and medicine are easing and extending our lives. U.S. household wealth is at an all-time record high.
We should be thankful.
Yes, the gains have gone disproportionately to top earners. Yet as Phil Gramm and Michael Solon pointed out in a recent op-ed in The Wall Street Journal, since 1979 the bottom quintile of Americans have experienced a 31% increase in real income. The second quintile (often referred to as "the working class") saw a 32% increase. And the middle quintile (the American middle class) saw a 37% increase.
This income is less equally distributed here than in the other 34 members of the Organization for Economic Co-Operation (OECD). But the OECD also reports that U.S. median disposable income is 42% higher and household wealth is 210% greater.
We should be thankful. After all, not many Americans would give up 42% of their income so that high-income earners earn less.
There are millions of Americans who are struggling economically today, of course. Yet - as someone who is reading a forum about how to grow and protect your investment capital - you are almost certainly not among them.
Be thankful. And recall, too, that this is a season to remember the neediest.
Why do Americans earn - and have - so much more? After all, our economy produces almost a quarter of the world's wealth.
It's partly due to our economic system. Capitalism is the greatest anti-poverty program ever devised.
America cultivates, celebrates and rewards the habits that make men and women successful. It promises that anyone with ambition and grit can move up the economic ladder, that everyone has a chance to better his or her lot, regardless of circumstances.
Entrepreneurs are given free license to innovate and create. Profit is never something to apologize for. Rather it is proof that the businessman offers customers something they value more than what they trade.
Natural Bounty
However, our economic greatness is also an accident of geography. Buffered by two oceans and a rugged frontier, we have always had plenty of land and vast natural resources.
Consider our rivers, for example. Transporting goods by water is 12 times cheaper than by land, a key reason civilizations have always flourished around rivers. The U.S. has 17,600 miles' worth of navigable waterways. That's more than the rest of the entire world. (The Arab world, by contrast, has just 120 miles.)
We have countless acres of arable land, many of the world's best deep-water ports, and - thanks to shale and light oil - huge new reservoirs of energy. That has helped send energy prices plunging recently.
You might be thankful for that, too.
Then there is the remarkable performance of our financial markets. Bondholders have enjoyed a massive bull market lasting more than 30 years. Stocks are near all-time record highs. Even long-term gold holders have seen the metal appreciate more than 350% from its low of $255 an ounce in July 1999.
Will the economic boom continue? Will the market continue to rise?
No one can say with certainty. However, Thanksgiving is not traditionally a time to speculate on what you may have in the future. Rather it is a time to pause, relax, enjoy, count your blessings and give thanks for what you already have.
Yes, most of us are also dealing with various health, money, personal or financial issues. But take a close look at your life and you'll find plenty to be grateful for.
From all of us here at Investment U, have a happy, healthy and peaceful Thanksgiving.
Good investing,
Alex
Editor's Note: We're not just richer than ever. We're also healthier and living longer than any prior generation. And one tiny Ohio company has lined up the key patents for perhaps the most powerful medical advance since the X-ray. FDA approval is imminent, and when it comes investors could see their shares quadruple. Learn more here.
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