Times are good for me. Clients come in toting smiles, portfolios are up, valuations look good (i.e., stocks by traditional metrics are not yet pricey), we do a little rebalancing and bid a happy see-you-in-six-months farewell…
Watching wealth build is a wonderful thing… Our portfolios rise and we’re richer, right? Well perhaps, but only to the extent that our increased paper value equates to a greater supply of goods/services at the end of the period measured…
Now don’t look, just take my word, the coffee cup from which you sip, the mouse you just clicked, the monitor you’re reading, the chair you’re sitting on and the desk on which you rest your elbows are all foreign-assembled goods (not the problem) that made their way to your abode via a trade for a U.S. buck or two.
Year-to-date the S&P 500 Stock Index is up around 8%… Year-to-date the U.S. Dollar Index (thanks largely to Fed policy) is down around 8%. Yes, you have 8% more money, but, alas, it buys 8% less stuff. Net result (not counting taxes), no real increase in wealth…
Just saying….