The Last 15 Years In the DJIA: 0.14% Annual Return

Submitted by Simon Black via Sovereign Man blog,

One of the great myths about investing that we’re told by the mainstream investment education is that we should “buy and hold” for the long term.

I remember being taught in a personal finance class long ago that I should just buy the S&P 500 index, walk away, and that years later I will have achieved huge gains.

The premise is that over a long period of time, it doesn’t really matter at what point you get in and out. The long-term trend of the stock market portends that you will make money.

It’s those kinds of investing myths that become axiomatic through repetition. You keep hearing the same thing over and over again and pretty soon people believe it.

Let’s look at the data.

It’s true that stock markets have plenty of peaks and troughs. Going back to the last relative peak, the Dow Jones Industrial Average (DJIA) hit just over 14,000 in October 2007; back then this was an all-time high.

If you had bought the DJIA back then, your return on the increase in share prices through today would work out to be a measly 3.5% on an annualized basis.

If you adjust that for taxes and inflation (even using the government’s own monkey numbers for inflation), you’re looking at a real rate of just 1.2%.

Now just think about everything that you saw in the last 7 years. The volatility. The risk. The turmoil.

Was it worth it? Probably not.

But if we go back further and hold an even longer-term view, the picture must brighten, right?

Let’s go to the peak before that. In early 2000, stocks once again reached what back then was an all-time high.

If you had bought the S&P 500 index back then (which is exactly what I was told at precisely the time that I was told), your annualized rate of return through today would be just 2.17%.

If you adjust that number for taxes and inflation, your real rate of return would be a big fat 0.14%… as in less than 1%. It’s practically ZERO.

Think about what you saw over the last 15 years in the markets—the collapse after 9/11, interest rates cut to zero, interest rates ratchet up again, huge swoons in markets, the credit crunch, Lehman’s collapse, the debt ceiling debacle, etc.

Is all that really worth a return of 0.14% per year? (i.e. 14 cents on every $100 invested)

It makes absolutely zero sense to do this with our money. But that’s what we’re forced into right now with most conventional investments at their all-time highs.

Bottom line—you don’t HAVE to be invested in the market. Sometimes the best investment you make is the investment you don’t make.

The challenge is, of course, that if you’re not invested in the market, your money is just sitting at the bank, earning less than the rate of inflation.

Welcome to the world of mainstream financial options. You’re damned if you do and damned if you don’t.

The conclusion here is very simple. It’s time to move on from the mainstream. There’s too much technology and too many global options now to be lulled into conventional investments that are born to lose.

The $9 Billion Witness - JP Morgan

VIDEO Collection on #GlassSteagall - The banking legislation to take back America from the banking oligarchy

Watch and learn.  Reach out and talk to people.  Don't be fooled by the red herring stalling tactics bankers have been using for decades.  Things have gotten worse since 2008 - now the Federal Reserve is covering for the bankrupt bankers better than ever before, and NO ONE is AUDITING the Fed.

This is financial socialism.  They privatize the gains and socialize the losses.  It is also theft. Racketeering. Market rigging.  Cartels fixing prices to keep out non-cartel members.  They are creating a stateless corporate behemoth similar to IG Farben of World War II.  They circumvent, break, bend, and ignore our laws while sticking us with austerity, and the loss of liberty.

This is not a left, right, or center issue.  This is an issue for the 99% because the 1% are making the rules.

Would a Coalition of Occupy and TeaParty Make Sense? #GlassSteagall #PublicBanking #EndtheFed

Have you ever heard of the strategy of war called divide and conquer? The Romans used it to conquer in Europe and the British used it to conquer China during the Opium wars.  Now it is being used on us in the United States, as well as in Mexico, Canada, Europe, Russia, Africa, the whole damn world is on fire because we are being played like pawns in a global game of chess.

Here in the USA, we are all aware of the Tea Party and the Occupy Wall Street movements.  But do we know what they stand for and whether or not there have been people revolting like them in the past?



Let's look at right now for example.  Both movements are fired up about crime, corruption, coercion, taxes, economic conditions, and the quality of life in our communities.  We just disagree about who's responsible (who to blame) and how we should fix the problem (social engineering).

Ever heard of United We Stand, Divided We Fall?  Do you think the tactics still work today?  You'd better because we are split up like fools, allowing the manipulation to continue.  We don't even know it but the misery we feel today inflicted on us from outside forces and what we call the boom bust cycle or just life these days, is not happenstance.  You could not purposefully screw up government and finance any more if you tried.

Both Occupy and TeaParty want a better quality of life and to be left alone to live it.  Some blame government, some blame large corporations, some blame not so secret societies working like organized criminals.  Either way you look at it, things are fairly screwed up and we are not getting any younger.

It's about damn time we work together.  Put our heads together and think of ways to make a difference, pronto.


Writing for the Huffington Post, Bob Edgar suggests this is a good idea.

Left, right and center, Republican, independent, and Democrat, pretty much everyone agrees that our system has been corrupted. Big money, from banks and insurance companies, the medical lobby, defense contractors, the trial lawyers, the big unions and a boatload of other special interests, is in control.
The power of big money is why our tax laws allow some of our largest corporations and richest citizens to pay less than their fair share of our national expenses. It's why our military invests in high-tech weapons that are of little use to our troops in the Afghan mountains and Iraqi deserts. It's why the financial "wizards" who've nearly run our economy aground can get away with collecting fat bonuses drawn from government bailout funds. It's why we grow ever more dependent on energy purchased overseas from people who don't like us. It's why we can't get our act together to tackle the challenge of climate change. It's why Congress never seems able to do much of anything.

Writing for Fox Business, Dunstall Prial wrote something similar, and quoted several others who thought the same.

Virtually without exception, protesters who are willing to share their specific grievances inevitably connect their anger to the bailouts of the big Wall Street banks.

The image below was taken from Paul Hastings posting.  it shows how we started out the same and ended up different.  We should recognize that both movements have suffered from the Divide and Conquer efforts of billionaires that benefit from the status quo.

Comedy Central comedian and serious thinker Jon Stewart demonstrated the stark differences between how the media portrayed the two movements in a segment on his show.

We definitely have our differences, and that is how the powers that be split us up and that is how they continue to pilfer at our expense.

Until we put aside our differences and stand up for a common cause, we will be sidelined.


I say again, Would a Coalition of Occupy and TeaParty Make Sense?

I'd like to hear your thoughts.  Add comments below.

Proposal for American Prosperity: Localize Deposits, Starve the Beast #GIABO #Transition #Localize

If city, country, state, and Federal governments around the US move their primary banking and deposits out of the Big Four (JP Morgan, Wells Fargo, Bank of America, Citibank) and into small local banks, the economy would begin to recover immediately.

This will not happen so long as the cost of energy is a barrier to trade.  Therefore, local communities should begin to shop locally for everything, as much as possible, only going to long distance markets when there are no better alternatives.  Notice I didn't say CHEAPER.  This is not going to be about price.  We are not going to negotiate the future of the world with those who choose to hang on because their livelihood depends on the status quo.  Home buyers will get mortgages, car loans, safety deposit boxes, and investment accounts, all from locally owned small businesses, the kind that thrived before the days of mega corporations.  Home builders will source their materials locally, possibly substituting non-local goods with alternative materials, preferably reusing materials that have already been "spent".  Restaurants and grocery stores will shop from local farmers markets.  All of this action will circulate the money within a community, but not strip it out like a Walmart, Burger King, McDonalds, Home Depot, or Whole Foods.

Only those communities that cannot source food will "import" from outside their local area and soon they will find that intolerable as the price of oil climbs to all time highs and the cost of modern agriculture is no longer cheaper.  Many people may ignore these words now, but wait until oil spikes again, for whatever reason.  Then you will see.

Unemployment will plummet as local business hire local people.  Many may shift industries, getting training, learning on the job, or work in apprenticeships and internships.  City and State tax revenues will return as small and local business cannot threaten to leave town when their employees and ownership are local.  No longer will the big box mega corporations be able to starve cities and states of tax revenues because they "promise to bring jobs to the local economy".  No I am not talking about so many employees, I mean many many Americans would become self-employed and that means reducing our taxable Federal income.  This will allow us to STARVE the BEAST.  The Federal government will be forced to bank local just as we do because we will cut off its primary source of funding - the federal income tax, and we will do this just as legally as the big banks and their puppet Federal Reserve of NY have stripped our economy of virtually everything since 1913 (and their predecessors have done since before the American Revolution).

We should begin to release our own currencies based on the 100% deposits of the community banks which will lend out only up to the level of their risk tolerance but no more than 100% of deposits.  and we will barter just as humans have done for thousands of years and how the early settlers of North America did only 300 years ago, and how rural communities have done up until the last 30 years.

The "wealth" of our world will not solely depend on how many US dollars line our income statements and balance sheets.  We will accept these new currencies as legal tender and will operate an exchange where neighbors can trade for dollars, gold, silver, or even swap one item for another. 20% of the economy labeled as "underground" already functions much like this and they survive BECAUSE they are outside the system. Otherwise they would go broke too.

How do I know this will work?  Because it worked before. Jackson killed the Second Bank of the United States (and soon thereafter paid off the national debt for the ONLY time in history) by moving the deposits of the US Federal Government to the state banks.

The Second Bank of the United States thrived from the tax revenue that the federal government regularly deposited just as the Federal Reserve Banks do now, both owned and controlled to a large extent by foreigners. Seeing his opportunity to starve the beast,  Jackson struck at this vital source of funds by signing an executive order instructing his Secretary of the Treasury Taney to deposit federal tax revenues in state banks.  In September 1833, Secretary of the Treasury Roger B. Taney transferred the government of  Pennsylvania’s deposits from the Second Bank to the Bank of Girard in Philadelphia, the locally controlled Bank of Stephen Girard, which had bought the assets of the First Bank of the United States when its charter was not renewed in 1811.  This is how the London Connection bank went bankrupt.  We stripped the leech off of our balls and it shriveled up and died.  This is what we should do now to return control of our nation to our elected officials and bureaucrats.  We will deal with their corruption and incompetence later.

Why should we as individuals and families make the decision to do this? Because we now know the truth about American history, the manipulation and control that has been exercised on us by the London Connection since before our Independence.  We are aware of their plans to manipulate us into the throngs of war.  You can hear their appeasers now, suggesting we sanction Iran and send troops into Syria.  Many see this as a left right paradigm, I see it as a patriot-traitor paradigm.  Those that persist in driving us to war around the world ostensibly to protect our national interests (oil and commerce), liberate (the markets), and defend our national security (by maintaining military troops and bases around the world) are the traitors.  They are committing treason against the spirit of the Constitution, even if they have changed our laws to fit their needs.

This London Connection, of international bankers have stripped us of our wealth and profited from our complacency.  The greatest obstacle to those who hope to reform America is complacency by those who argue that they shouldn't complain, they have it well.  So that’s the attitude you are going to take? That you will not help out fellow Americans? You will describe them as lazy? Simply because you ere able to achive success? And you say that you never got a helping hand? I challenge you to find a single industry that has not benefited from the socialist welfare that you so abhor!  

We are awake.  We are a legion of citizens that will no longer be victims of their games.  We are Americans, Citizens of the Free World.

#GIABO, #StarveTheBeast, #EndtheFed #Localize #Transition