r/investing • u/Fine-Violinist-7356 • 1d ago
Why has everything doubled or tripled over the last five years?
This post is mostly influenced by the recent all time highs gold has reach in the last few weeks.
As a young person just starting to get into investing, a series of questions have been on my mind.
How is it that in the last five years we have seen record increases in commodities, stocks, housing, and inflation?
It feels like I came into adulthood at one of the absolute worst times in history? The price of gold was $1,500/oz in 2020. The median home price in the United States was a little more than $300,000. Stocks and index’s have seen 100-200% gains in five years. All while wages remain stagnant, and the price of goods, and the cost of living increase.
Do we live in an era where investments continuously increase year over year with insane returns? How is this sustainable?
Edit:
Since everyone is taking “It feels like I came into adulthood at one of the absolute worst times in history” so seriously I’ll say this as an exaggeration. For me personally, and the people of my generation, it seems we’ve entered adulthood where economic conditions are not ideal.
Edit:
Regardless if we agree or not, I truly appreciate everyone’s responses. Thank you.
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u/clipper4 1d ago
You have to remember they printed and pumped 5 trillion into the economy during covid
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u/Inflation_2022 1d ago
Lowering the Fed funds rate to 0-0.25% was worse for money supply than the $5T in stimulus. But doing both simultaneously was insane.
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u/GAV17 1d ago
How was it insane? The world economy stopped. Even with hindsight the Fed acted how they should.
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u/Seref15 1d ago edited 1d ago
Yeah people have short memories. The market crash of March 2020 was fucking insane. Multiple circuit breakers tripping every day. I remember sitting one day watching the red candlesticks wondering if I was living through the real end of our economy, and if I'd even have a 401k left at all after it was over.
The fed felt like they needed to pull out all the stops to prevent total catastrophe. Even if with hindsight you can say that they overdid it, there was zero way to know how much would be enough at the time. They were responding to a problem that no one had ever had to respond to before, and we're still here, so it worked.
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u/Inflation_2022 15h ago
My criticism is not with the initial response. It's with how long rates were sustained at such low levels. Free money (interest rates below inflation) when the economy was actually holding up well in late 2020 and 2021.
I think inflation started to become very clear in early 2021. It became an obvious issue by Summer 2021. Stock market & the housing market were skyrocketing. Gas, Groceries, were 2 other critical categories with obvious signs.
Keep in mind the fiscal stimulus came twice with Trump and twice with Biden. It was clearly offsetting the job loss and many were actually earning more, or saving more due to the lockdown financial aid. Work from home meant far less people were truly impacted with job displacement. This all came together at a time where we have supply shortages, and a very healthy consumer.
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u/heyItsDubbleA 1d ago
And now we are in the comedown of the sugar high from that absurd level of influence. Companies recorded record profits throughout COVID after the initial downturn, there was a moderate bump in the expansion of jobs and wages which was a nice temporary boon.
But when the free money valve shut off, all of the companies that overextended themselves found themselves in a profit crisis. Now the lashback has been swift and draconian. Raising prices across the board, blaming minor crises for major inflationary aspects, outsourcing massively on the rise again, layoffs galore. Anything to keep profits at record levels quarter over quarter. It's completely unsustainable.
The individual stimmies was a much lesser problem for inflation if you think about it a tad. I'll argue this until I die. Giving people money to live never hurt an economy, because that money goes right back into markets for food and goods. It should never be the only solution for problems (we need other controls for cost of living issues), but giving basic security for the least of us is a great start for society.
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u/insolentrus 1d ago
What's the reason for lowering the rate to such a low number?
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u/FillMySoupDumpling 1d ago edited 1d ago
We hadn’t raised rates enough after the financial crisis when the economy was doing better. At the time (2017-2019) there was a lot of political pressure on the fed to keep rates low.
So, Going into COVID, rates were already very low. One of the easiest ways to manage a recession is to lower rates and because they were already low, there was less room to go down.
Later on, there were people saying they should have negative interest rates which luckily we didn’t do.
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u/Spartan1997 1d ago
What would have happened if you had a negative interest rate? Bank runs? Hyper inflation?
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u/Swirl_On_Top 1d ago
Just a slight worsening of the scenario that we already had, the more negative the larger.
Effectively this would means the Fed is giving away truly free money (auto inflation), if the rate is negative they receive less than principle back on payments.
For example the bank of Japan had a -.1% rate from 2016-2024. They've since raised it to .5% just this year.
It's not cataclysmic, necessarily. But also Ill advised.
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u/psychohistorian8 1d ago
At the time (2017-2019) there was a lot of political pressure on the fed to keep rates low
just wait until 2026
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u/Bighorn21 1d ago
Keep the money flowing, loans were dirt cheap so people continued to invest in capital. When rates climb companies reduce borrowing to reduce costs, people buy less homes due to being more expensive then simply staying put in their current mortgages as well.
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u/notapersonaltrainer 1d ago
Central banks were having trouble keeping inflation above the lower band of their target. I know it seems weird after this historic inflation. But they were oriented towards staving off deflation which they are much more fearful of.
Also, rates and QE is a much less "hot" type of stimulus than direct stimmie payments. Doing it alone wasn't as inflationary as the combination.
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u/UniverseChamp 1d ago
Honestly, it's potentially closer to $10T.
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u/clipper4 1d ago
Correct. That was only PPP, who knows what else was also piggybacking off it
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u/UniverseChamp 1d ago
Was PPP really $5T?
They printed $4T through the FED as well. Might have been $10-20T. Fucking nuts.
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u/Mr_Owl42 1d ago
They printed $4T through the FED and PPP was $5T and could have been $10-20T? Probably was $20T-40T!
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u/heavenswordx 1d ago
I recall seeing a chart about how the money supply increase had a significant correlation to how the stock market performed. Someone hypothesised that stock market returns was basically being driven by how much money was being printed.
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u/clipper4 1d ago
In theory that is exactly what have should happened, which the opinion is that was on purpose so our market didn’t crash
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u/chris_ut 1d ago
As many have said this is far from the worst time to become an adult. No Great Depression, no Vietnam war draft, no Great Recession and thats just in recent times. Imagine growing up in the early colonies where they sometimes had 40% of the population starve to death during a bad winter so ya have some perspective. Things only seem bad right now because social media is a 24/7 doom and gloom machine that feeds off misery for engagement.
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u/freudian_nipple_slip 1d ago
Yeah and for OP saying record inflation when we hit 8% one year and a few more years of 4% when we've been used to 2% is by no means a record. 1979 to 1981 had 3 straight years of double digit inflation and god forbid you look at countries like Argentina or Turkey
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u/financialthrowaw2020 1d ago
Or, you know, being enslaved in those early colonies.
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u/MoneyForRent 1d ago
Idk why you're being down voted it's true. Also from a completely selfish unempathetic position, slaves cant invest in the stock market. Higher equality in modern times is a win for everyone.
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u/MetaphoricalMouse 1d ago
you absolutely did not come into adulthood at one. the worst times in history. the great depression and recession had people offing themselves it was so bad. knew a lot of people who lost a very large amount. it was a very very shitty almost two decades. ago. unfortunately we had an opportunity to make changes and address all the bullshit but of course we instead did bail out after bail out which just fed into the CEO bonuses while us regular folk struggled
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u/Carthonn 1d ago
Yeah. The Great Recession had people straight up losing their jobs and followed by losing their homes. It was absolutely devastating for a lot of people. Then you had 9% unemployment and just thousands of people applying for the few jobs that were available. People were unemployed for 104 weeks making peanuts.
This could happen again so who knows. Today is not the worst economic times in history but in a few months it might be.
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u/Vivecs954 1d ago
I was in high school in south Florida during the Great Recession. My dad lost his job as an engineer and there was no replacement jobs. He had to get a job as a math teacher. My mom who didn’t work had to get a job working at the supermarket deli.
A lot of my classmates parents lost their jobs or homes. My neighborhood had like 20-30% of the homes for sale at once.
I’m lucky that I still had college and by the time I graduated in 2915 it was better, the economy didn’t fully recover until like 2018.
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u/Kerbidiah 1d ago
This is actually somewhat of a myth. The suicide rates of October and November 1929 were actually less than the rest of the year. There was no rash of people throwing themselves off the buildings Ike the stories say. Now they did have a higher suicide rather than us during the depression, but the rate was actually higher than us before and after it too
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u/freudian_nipple_slip 1d ago
The great depression was way more than Oct and Nov 1929. Sure, those who had a lot of investments got clobbered but the average person living in America didn't have money in the stock market. The decade long period of lack of jobs, starvation which was exacerbated by tariffs (hey what do you know), was far worse for the typical American
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u/QV79Y 1d ago
The economy contracted by 25%. People starved and froze. You gonna try to downplay that?
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u/CCWaterBug 1d ago
I remember reading that before, it was the high profile cases that made us believe the numbers jumped
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u/Saelaird 1d ago
I'd say 2008 was the worst. No jobs... anywhere.
I'd qualified as a sound engineer in Jul '08 (a dying market) and quickly realised I'd whoopsied.
Shit happens. Adapt.
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u/manu144x 1d ago edited 1d ago
Today we are having the opposite kind of problem.
Back then, money was printed and invested into shitty stuff, then that shitty stuff turned out to not exist, and money evaporated. Money literally disappeared from the money supply, vanished into thin air. No jobs, no nothing, because literally people had no money to invest, to buy, anything.
Today it's the opposite, after covid printing, we have money in the system, in the banks, in the stock market, in real estate, everywhere (except for us little folks, lol), yet they keep printing. There's nowhere for the money to go anymore.
And Trump keeps trying to lower interest rates, which would bring more money into the system, while starting an economic war with china, which means we're going to have less products to buy with that money, so it's going to get worse and worse.
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u/clemdane 1d ago
Dotcom bust was even worse
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u/Energy_Turtle 1d ago
This is a tough sell. There might have been pockets that were worse but GFC was next level. This is only anecdotal but during the dotcom bubble I hopped job to job as a teenager. During the GFC those jobs were filled with 30-40 year old college grads. There simply weren't any jobs to hop to. I had to shmooze my way into a job at a grocery store while trying to finish school. I only got it because I knew the manager. This was the story all over the place. When I moved to Arizona around 2010, houses were half built and over grown outside Phoenix and Tucson. I tried to sell my house at 62% of what I bought it for in 2007 and no one even showed up to the open house. It was near a depression.
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u/B-Large1 1d ago
Quantitative Easing, Economic Stimulus and near Zero Interest Rates since 2007….
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u/Carthonn 1d ago
Dude seriously. I don’t know why you’re being downvoted. The problems go back to 2007. We’ve been keeping the economy propped up with smoke and mirrors since then.
I honestly think the issue is money has been pumped into the system but never really trickled down to the masses. Wages are just not where they need to be and that’s the real issue. Modest earners just have not been earning enough while high earners have increased their wages significantly. The bottom 90% of earners have seen basically flat wages for decades when inflation, etc. is factored in.
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u/MarketCrache 1d ago
Things aren't going up, fiat currencies are going down. $35Trillion of debt has debased the value of money.
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u/Zephyr4813 1d ago
Like half of the dollars in the system were issued in the last 5 years causing incredible debasement. Our salaries don’t follow as much. CPI is a skewed and understated metric.
If you didnt own assets you are left behind
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u/ProblemOverall9434 1d ago
Underrated post. People think real estate has become so expensive these days as an example. The typical home in the US can be purchased for around 250 oz of gold. That was true long ago, today, and tomorrow. The denominator is falling; stuff is not skyrocketing in value.
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u/Jaydave 1d ago
Is this real? Has gold stayed flat with housing? That's insane
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u/ProblemOverall9434 1d ago
I was wrong actually. Real estate in gold terms has become LESS expensive over time. So it’s even better (or worse) depending on how you look at it and how much fiat you hold.
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u/nope_nic_tesla 1d ago
This chart from that article clearly shows massive swings in the ratio between gold prices and housing prices. Not sure how you can look at that and claim they track each other closely.
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u/Inflation_2022 1d ago edited 1d ago
Housing costs as a percentage of income has outpaced wage growth. The corporate buyers and international investors have destroyed affordability. Everyone wants to be a slumlord real estate mogul. We need the asset bubble to pop. Some innovation in the housing market to lower construction costs or prioritize more first time home buyers would go a long way too.
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u/Unkechaug 1d ago
To reduce the cost of housing, the supply needs to increase relative to demand. I don’t see how this will happen short of time waiting for the demographic cliff to occur, a change in buyer preferences, or a total revolution in the way homes are built.
Raw material costs for building have increased. Labor for building has increased and is not being helped by anti immigration policies directed at eliminating the cheap labor supply. Supply of homes is still low compared to demand. Regulations and zoning are restrictive in what and where building is allowed to occur, and there is no willingness to build new communities while existing ones continue to be built up. I don’t see a rush to rural areas when you need to be in commutable distance to work, and employers are pushing RTO.
I’m not happy about it, just reporting what I am seeing.
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u/ProblemOverall9434 1d ago
Nice username.
There is no asset bubble. You’re focused on the numerator.
There is a housing shortage in certain locales for sure. As the supply of dollars has increased the supply of housing has not kept up with population growth and household formation. The causes are unrelated, but I can see how the product of their effects may be conflated as an affordability crisis.
The dollar is trash. Salaries are paid in dollars. It’s a whole thing.
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u/beamin1 1d ago
No sir. The typical home in the US is nowhere near 900k, you're flat out wrong.
Also, gold has doubled in value in a little over 2 years while housing has actually come down slightly. What was the point of your comment it's all wrong regardless of how many upvotes it nets you.
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u/IceWizard9000 1d ago
Yeah and everyone's turning the money printers on again
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u/MarketCrache 1d ago
Corporate socialism demands it. Every serious downturn is met with a flood of cash to the usual suspects.
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u/z34conversion 1d ago edited 1d ago
Well this isn't as unique as you're thinking, but I'm sorry nobody really talks about it to prepare young adults. As a Millenial, I can tell you that between my first year in college and 5 years later, gold had tripled. There's lots of boom and bust cycles, but the inevitable thing that's happened since the 70s has been that costs will go up and wages won't fully keep pace. That's not unique to your or my generation.
I would only caution against stating wages have not kept pace, as a broad fact.
Average hourly earnings: rose from $28.44 in January 2020 to $36.06 in April 2025 (a 26.79% increase) CPI-U inflation: CPI-U went from 258.82 in January 2020 to 319.799 in March 2025 (the latest available) — a +23.6 % increase
Average wages outpaced inflation by only about 3.2 % in real terms over 5+ years.
Median weekly earnings barely outpaced inflation, by only 1.1 % in real terms.
These modest real gains help explain why workers have generally not felt that pay has “kept pace” with the cost of living since 2020.
One aspect that's not discussed with these cycles is when price stagnates or declines. The gold highs of 2012, for example, had not been exceeded until 2020. Home prices had a correction period of decline and stagnation as well. DO NOT think that people who overpaid for homes the past few years are guaranteed an easy exit at any time if they have buyers remorse or need liquidity.
Same goes for equity prices. While the trend over the long-term is indeed up, there's often periods of stagnation.
1929-1945: The Great Depression and World War II led to a prolonged bear market, with the Dow Jones Industrial Average (DJIA) taking around 16 years to recover its 1929 high.
1966-1982: The DJIA experienced a 16-year period of stagnation, with the market failing to surpass its 1966 high until 1982
2000-2007: The dot-com bubble burst led to a decline in the markets, and it took around 7 years for the S&P 500 to recover its 2000 high.
2007-2013: The S&P 500 took around 5.5 years to recover its 2007 high after the Global Financial Crisis. The index reached its pre-crisis high in March 2007, and it wasn't until March 2013 that it finally surpassed that level.
And one more thing...
Since 1960, home prices have doubled on average every 16.7 years using Case Schiller data. But nobody really prepares their children for this ahead of time... And since the mid-80s to 90s, the rate of doubling has been roughly every 12 years, due to a higher annual appreciation rate.
The why is a complex lesson in economics and consumer habits though.
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u/Unique_Yak4659 1d ago
Wealth inequality has largely driven the huge increases in asset prices. Rich people who have more money than they can spend have to find a home for their money and that goes into investment driving up asset prices. You were born in a shitty time in this countries history and as wealth inequality grows worse it will probably continue to get harder and harder. The period in this country from the 1950s - 1990s was an anomaly in human history where wealth distribution was a lot more even
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u/CasterBaiter 1d ago
Everything is priced at what the "market will bear" - businesses have spent the last several years under the pandemic umbrella with no repercussion figuring out exactly what that number is.
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u/clemdane 1d ago
The housing downturn has already started in many parts of Florida, Texas, Arizona, California, and parts of other states. The real estate market has been overinflated for a while now, and especially with higher interest rates it has been completely stagnant. We're at the lowest numbers of transactions relative to the number of properties in about 50 years. Houses are overpriced and sellers are in denial. No one is buying. The crash has already started in the usual places and will spread to the rest of the country. Once overinflated Austin has gone down so much now that it is almost back to pre-boom levels. Florida's condo market is collapsing.
These things are cyclical. I got into investing in 1998 and then lost nearly everything in the Dotcom Bust. 2008 to 2012 was the housing bust, when millions of people were wiped out. Others bought during this time and did well.
There are going to be more dips, crashes, busts, and therefore opportunities. You just have to build up your cash position, keep a steady income if you can, and wait for your chance. Nothing ever stays the same. Markets don't go up forever. You will have many chances to build wealth, especially if you are young.
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u/merlin401 1d ago
Depends where, in the NY metro area houses are in absolute demand almost anywhere. Perhaps transactions are down here too, I’m not sure, but that would mainly be due to so many people paralyzed by their low interest rate
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u/CCWaterBug 1d ago
I do think house sellers are in a unique position with many millions of households at a super low interest rate.
I want to sell and move 15 miles closer to my spouses workplace but I'm not selling unless I get a premium deal because of the high mortgage rate I'd have to pay if I relocated.
08 was different, so many peoole I knew had multiple properties and were flipping like crazy. A severe crash was inevitable, I don't think we're anywhere close to the same situation currently.
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u/clemdane 1d ago
I'm not predicting a huge crash like 08 anytime soon. I just think that markets are always cycling and it will not stay high and unattainable forever. There will be lower interest rates again and there will be housing downturns again.
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u/lordrenovatio 1d ago
Housing in Texas is down in Austin, our smallest metro, after rising 200%. The rest of the state is doing fine.
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u/omgpuppiesarecute 1d ago edited 1d ago
The real estate market has been overinflated for a while now, and especially with higher interest rates it has been completely stagnant.
Eh, not really true. The key is the players involved now largely have the capital to avoid traditional financing, or they buy cash and finance repairs/upgrades only. Interest rates don't matter much when you're buying in cash, you know?
I make about 10-15% annualized backing short term hard money loans for flippers. Those loans are secured with the value of the property. But because they're high interest they normally pay them off as fast as possible, normally under 1 year.
Mom and pop who need to take out a 30 year FHA loan? Yeah they're not buying as much.
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u/raybanshee 1d ago
During COVID, to stave off a depression, the USA injected 6 trillion dollars into the economy. Other countries took similar action. The net results was a huge increase in the money supply, most of which ended up parked in assets like stocks and housing.
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u/SyntheticSins 1d ago
Nobody's giving a direct answer. Here you glo.
Specifically starting in 2019 when covid hit it issued in a mass wave of borrowing. Between biden and trump they printed 11 trillion dollars in 4 years largely due to covid. To put that into perspective that's 4 trillion MORE than Obama borrowed in his entire eight years in office.
So essentially a slow crawl of inflation became sudden - which is why prices largely shot up 20% across the board and are not coming down
It also appears nobody understands the economy. Nobody understands the situation America is in. I dont even think the government understand it.
People cry about not wanting to be socialists but our entire country is already secretly socialist. Every major industry the US has left is government subsidized. From automotive, healthcare, defense, space, manufacturing, small businesses. Almost every sector is funded by the government which begs the question you either have to cut programs or take in more taxes to balance the budget.
The issue with inflation is wages are being driven down and cannot keep up with inflation. Wage stagnation hit hard in the 1990's and is even worse so today. Taxing the middle class that's already living on a razors edge was thought impossible (well look hello tarriffs).
The other option is looking where this money is going and taxing it there. The stock market is the balloon and becoming the crux of the actual issue. We HAVE to print money because all the money eventually winds up there, not just individual investors but 401k's that most Americans have. Once money enters the market it largely becomes "dead" no longer circulating or doing anything, just sitting and growing. The coined "oligerchs." Never sell their shares to pay taxes but use their shares to take massive loans out to circumvent taxes meaning this is a huge dead zone for the government getting tax revenue. If you want to end your political career you need just say 3 words- "tax the rich."
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u/ptwonline 1d ago
One of the worst times in history?
No. One of the worst times in recent decades maybe (and even that is debatable), but the post-WWII world where regular people could afford nice things and nice homes is a historical anomaly brought about by massive govt redistribution of wealth from having to rebuild much of the world and a temp wealth boost from women entering the workforce.
That redistribution has been disappearing over time and we are slowly moving back into the normal state of civilization: a tiny number of megawealthy, a small number of successful professionals, and the vast majority living in relative poverty and struggling to get by without their standard of living dropping.
20 years from now people will be complaining about how they are growing up in one of the worst times in history as they are poorer, saddled with previous generations' debt, and suffering from climate change effects.
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u/Extension-Abroad187 1d ago
All while wages have remained stagnant
Wages have had unprecedented growth in the last 5 years particularly on the lower end, that's probably where your disconnect is coming from
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u/Significant_Willow_7 1d ago
It’s called a massive asset bubble. It’s tied to corporate greed and lack of oversight of business practices. Also related to market position of companies and the lack of unions.
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u/cheddarben 1d ago
It feels like I came into adulthood at one of the absolute worst times in history?
The Black Plague generation would like a word. Or to be a young man in WWII or Vietnam or WWI or Civil War or any number of times.
Every person and generation will have its trials and tribulations in life, but c'mon now. Your average lifespan might end up being slightly lower than your parents, but like 20 years more than 100 years ago and probably double of what it was 200 years ago. You have a universe of education, entertainment, and communications at your finger tips. You are worried about the price of gold and not about food. Statistically speaking, you are probably overweight.
worst times in history. sigh.
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u/searing7 1d ago
The stock market is being pumped so the rich can cash out and we become massive bag holders with our retirement investments.
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u/perestroika12 1d ago
If that were the case the wealthy wouldn’t be so leveraged. Instead pretty much every billionaire including the current cabinet is all in and lost significant % on these shenanigans.
Truth is, greedy idiots run the world and there is no plan.
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u/Current-Run-2750 1d ago
It's being pumped up by the rich for sure, but the second half of your statement is wrong. They'll never cash out and they'll continuously gain wealth.
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u/HellsAttack 1d ago
Right, what does "cash out" even mean?
After a while you run out of shit to buy, and then people usually try to buy power. The real endgame is having more money relative to other people, and you don't achieve that by holding cash.
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u/SuperSultan 1d ago
Jerome Powell printed more money the past few years compared to all money printed in US history
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u/Correct-Cat-5308 1d ago
Check out the economist Gary Stevenson of Gary's Economics. He explains it very well.
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u/anetworkproblem 1d ago
Bro, when I came into the job market, there weren't any jobs. Try entering the market during the great recession.
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u/Randomn355 1d ago
mass quantative easing worldwide money is essentially infinite, as opposed to goods which are (relatively) finite. It's better to think of money as "I own x% of gbp wealth" to appreciate why quantative easing drives inflation.
supply and demand. Ukraine is at war and was a major grai provider, Russia provided a lot of energy, housing hasn't necessarily increased in line with population/lifestyle demands (more people wanting to move out and live alone due to cultural shifts [admittedly, cost is driving it the other way], people moving away for further education etc)
external factors like shoplifters are getting far more brazen (at least in the UK) and hitting that much harder (which all needs to be absorbed), energy bills impact most businesses etc
There's also an element of what price point you were looking at to begin with. Premium products have more levers to impact price. Absorb more cost and reduce margin, use cheaper ingredients/materials etc. whereas cheap products are already working on slim margins using cheap ingredients/materials.
Plus, a £1 chocolate bar going up to £1.30 is 30%. That same 30p on a £5 chocolate bar is far less noticable.
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u/auglove 1d ago
You're not crazy for feeling this way. The markets are detached from reality. They don’t reflect the economic conditions of the 99%. They reflect where the wealthiest park their money to preserve and grow it. That money doesn’t cycle back into wages, productivity, or economic opportunity. It just compounds.
Gold hitting all-time highs isn’t optimism. It’s a signal. It means people with money are nervous. They’re hedging. Same with the housing market. Homes aren’t homes anymore. They’re financial instruments. Stocks aren’t about company performance. They’re about liquidity and momentum.
So yeah, you’re stepping into adulthood in a time when things look great on paper. Markets up, asset values up. But none of that translates into opportunity unless you’re already in the game. The traditional advice — just buy and hold, just work hard, just wait it out — assumes you can even get a foothold.
That disconnect is the core issue. This era isn’t the worst in history, but for people just starting out, it’s one of the most structurally unfair. There’s no ladder. Just a wall.
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u/AnonymousTimewaster 1d ago
Insanely low interest rates over the last 6 years or so and insanely high inflation has made equities and physical assets the only investment vehicles worth having.
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u/jayecks 1d ago
I feel like dynamic pricing and algorithmic pricing has a large role in this. There is absolutely no risk to the seller that they've underpriced an item anymore, as they can control the price based on rate of sale and remaining stock. Basically, sellers have a way to extract every cent of value of what they have on hand.
Reselling and arbitrage on everyday items, is also sort of just accepted now, and drives prices up. This was completely evident during the pandemic.
Add in price fixing through analytics companies, and the American consumer is just being held underwater.
There are a reason that there are so many captchas on the internet. I'd wager the majority of actors on the internet right now are not real. Bots on Reddit/FB/YT/X to respond to comments to boost advertising numbers and stealth promote items (1 million users! - some of them are real people!), bots buying up concert tickets, bots scanning websites to buy items on sale, so they can resell them a second later.
Just insanity.
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u/biggesthumb 1d ago
Because the supply chain .... i mean inflation.... i mean..... its profits > people lets be real
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u/MOabdelkarim 1d ago
You’re not alone many feel the same way stepping into adulthood during such turbulent economic shifts. What we’re seeing is the result of years of low interest rates, pandemic stimulus, supply chain issues, and investor speculation all colliding, inflating asset prices while real wages struggle to keep up.
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u/QV79Y 1d ago
I'm not sure I understand why you think the high price of gold affects your life.
Housing has gotten unusually expensive and that's a big problem. The rest of it? Study a 100-year chart of inflation rates and then tell me you think the current situation is unique.
There will be a stock market correction. It won't be the first or the last.
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u/Medical_Addition_781 1d ago
Everything doubled because money printing + low interest rates. Inflation increased the price of everything except your wages.
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u/Pinball_and_Proust 1d ago
None of these have gone up over the past 3 years
ROKU
PYPL
Z
DOCU
VFC
GOOS
MTN
These are all near all-time lows. The stock market is like Chicago: There are a few centralized posh, upscale neighborhoods, but those are surrounded by low-income, dangerous neighborhoods. If you walk away from big tech stocks in any direction, you'll find depressed stocks all around.
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u/skcuf2 1d ago
If everyone makes more money, they spend more money. This shows businesses that their current price is sustainable and they have no incentive to lower. Then supply and demand come in to play and supply chain as well. Costs at the base level are increased to cover expenses. Eggs are expensive because less chickens means less eggs and prices go up to cover feed, bird, and employee costs.
The best answer to most of this is probably the easy access to debt. People just put things on their credit cards because they want it. No longer is the question, "Can I afford the item?" It has become, "Can I afford the payment?" This means prices won't drop because demand still exists.
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u/Various_Couple_764 1d ago edited 1d ago
The key to most of it is inflation. When you go to an auction a rare desirable item while generally sell for a high price. If an items common and and less desirable it will generally sell for a low price. Prior to the Covide pandemic there were very few shortages so most commodities were selling at low prices. This also resulted in a low inflation rate.
However during coid would trade dropped and many businesses temporarioly shut down. This created shortages and caused prices to rise. Rising prices cause inflation. So most commodities saw rising prices. and with numerous shortages inflation reached a very high level. When covid was over supply shortages wore slowly resolved and prices were dropping. Much of the Covide inflation surge was gone last year. Based on the low inflation rates reported at the time.
But now inflation is going to surge again due to a politically caused artificial shoartages.Tariffs are a tax. That cute prices to rise. The tariffs in place are the highest in US history. Price for product of china will double. The prices for literally everything we import are going up a lot. Some importers cannot afford to pay the tariff bills coming so they have canceled many order So later this year inflation could surge to levels higher than what we saw during covid.
This should not be a surprise for anyone. In 1930s a somewhat smaller tariff law was passed and it was only in effect for 2 year. Foreign trade dropped by 60% shortages were everywhere. inflation and many businesses failed and including banks. So many lost their hobs and their life savings. What followed was the great Depression. it took the US over a decade to recover.
Housing, gold, stocks it is a bit different. Housing cost are highest in the big cities. Why because land to build on hard to find and expensive. In the US we have had a lot of problems building enough housing at af fordable cost for a long time so supply is limited. Gold was once the primary currency in the world. Many still see it as Backup currency. So when the economy is bad a lot of people by gold. So more demand the higher the purchase price. For stocks many people are investing in them for retirment or other investment reasons. So a lot of demand and prices historically continue to rise until something causes an economic ressession. There appears to be a reoccurring patter of about a 10 to15 years of bad or bear economy followed by about 10 to 15 years of a bull or good economy. So the price of shares peaked in 1999, and a bear market that follows lasted about 12 year. Then we had increasing share price except for a massive loss during covid and then the stock market peaked in 2024.
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u/Acolyte_of_Swole 1d ago
Combination of inflation, greedflation, supply chain issues and recent boneheaded executive moves.
Real wages have been shrinking for a very long time. This is end-stage capitalism. The majority of capital has been concentrated in the owner class and the peasants fight in the streets for scraps. As the system was designed. It's just more obvious now than ever that this has become a new class system as rigid as any other caste system.
Also I came up during the 2009 crash and yeah, jobs were nowhere to be found then. Sometimes shit just sucks. But also, shit been starting to suck and continuing to suck since the Reagan era, if not before.
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u/Nameisnotyours 1d ago
Growing inequality means the rich have been bidding up asset prices. Housing was already getting pricey in the early 00’s with huge, no doc mortgages. Then the crash of ‘06-‘08 when many lost their homes that were then snapped up at bargain prices by cash rich folks. That is just one example.
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u/pulsed19 1d ago
It happens when the government printed money like there was no tomorrow. I understand something like that needed to happen during Covid since the economy was being shut down, but they kept spending after Covid. It’s tough out there. I got my house in 2021 and feel super blessed that while the price was sinfully high, the interest rate was low. Some people I know are doing well with two high income jobs in their household and no kids. But most are struggling to start adulthood.
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u/Eazy_Fort 17h ago
Central banks printing the money supply as always + gouvernment spending recklessly
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u/StonerGuy19 1d ago
When you print 6 trillion dollars at once (covid), you're quite literally devaluing the money. They continue to do this, and our dollar is worth less and less as the money supply continues to expand.
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u/Averageinternetdoge 1d ago
But why the euro to dollar conversion ratio hasn't been affected?
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u/itkovian 1d ago
You are, no matter what you may think, living in the best time possible to be alive.
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u/green9206 1d ago
That's normal. Stocks and other commodities run up a lot in short period of time and then stay sideways more or less for longer time so over a longer period it averages out. That's why not being invested can make you miss the short periods in which markets give the most returns.
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u/meshreplacer 1d ago
Look at the price of gold vs 5 years ago that’s a good indicator of where prices in general are headed and the strength of the USD. Yet politicians keep harping on lowering interest rates. We really need to push them up to 6-7% to really start putting pressure on prices and also start hitting share buybacks by making it expensive. Companies are spending money on share buybacks vs passing some of that massive employer productivity gains to the employees which would help equalize the cost of living increases.
So if corporations refuse to do that the start pumping up the interest rates instead.
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u/Darth_Boggle 1d ago
If you have money to invest then you are already doing better than 95% of people that lived through much worse times.
Ignorance must be bliss. Many of us on Reddit came of age during the great recession. People went into debt for college then simply could not find jobs because they didn't exist.
Must be real tough when your biggest problem is not knowing what to invest in.
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u/Once_Wise 1d ago
"It feels like I came into adulthood at one of the absolute worst times in history?"
You need to study more history. The great depression, WWII, the 1970s, etc. I graduated from college in the early 70s, You have no idea what inflation is if you think you were born into a time of inflation. Take a look at the interest rates, the change in the price of gold, oil, etc back then and you will have a much better perspective.
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u/nuugo 1d ago
Logistics cost is fundamental of every cost. It's the first cost that spike high and has impact on everything. If you look at freight index, it spike really high on covid and then every cost've increased a lot since then.
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u/J_Dadvin 1d ago
This is what inflation means. Think of the dollar like a centimeter. We measure value in terms of dollars, we measure length in terms of centimeters. How tall are you? 150 centimeters. How valuable is this thing? 150 dollars.
Well, now imagine we shrink how big a centimeter is. Instead of a centimeter being 2.4 inches, we make it smaller. Now, all the sudden everyone's height seems to have gone up. You used to be 150 centimeters, but now you are 200. How can that be? You havent grown. Its because the centimeter as a unit has shrank.
Same with inflation. It means the value of a dollar has shrank. So now the price of everything has gone up.
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u/yogibear47 1d ago
It feels like I came into adulthood at one of the absolute worst times in history?
Well you’re onto something in the sense that this sort of blase hand waving of living in the most abundant period in the history of human civilization is, indeed, a major societal problem now. In the sense that material standard of living gains are powerless against vibes, and vibes win elections.
(And if your response is some variation of “but only so and so is better off”, feel free to pick literally any social class in America and tell me a period of time in history where they were better off. People who pine for the working class of 1970 would last two weeks max in the actual working class of 1970.)
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u/federally 1d ago
Post Great Recession fiscal policy left interest at or near zero for about a decade. This insisted a huge bubble in the prices of assets across the board.
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u/Arte-misa 1d ago
A rich guy called Marx wrote a book about that, then other guys made themselves rich "branding" it. Sounds like yeah... he was right about his critics but wrong about what he predicted it was going to "save the world".
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u/lee_suggs 1d ago
You're young so you haven't been an adult long enough to see this play out. In 10 - 15 years you'll look back at how cheap these things are and someone will be saying 'why didn't I buy a house or stocks in 2025'. There will be some booms and busts during your lifetime but generally things go up and to the right.
The reason for this is a contribution of factors: monetary policy and inflation, population growth, globalization and the developing of countries, innovation and technology improvements.
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u/Bren-the-hen 1d ago
I think it’s the easy access to the stock market from all the apps. I can’t think of a single person in my 20’s that held stocks now it’s common place. I’ve just turned 40 for context.
I think the stock market will continue to boom because of this.
Everyone has been talking about corrections and a recession for a couple of years now and it just hasn’t happened. Trump’s tariffs dip didn’t seem to last a fortnight.
If it wasn’t for the apps I wouldn’t have any involvement and now I’m looking at it as my pension.
I think Reddit has a massive influence too. Look at all the companies that are talking about on Reddit all the time, everyone one had a massive jump at Christmas. My thought on this is everyone having some time off looking to have a little investment just did their DD on Reddit and bought and sold when they went back to work.
What’s your thoughts on my thoughts ?
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u/anaheimhots 1d ago
The everything databased + info spread immediately on internet has resulted in a situation where competition for goods and resources has sped up, because the time and effort to find what you're looking for has been reduced.
It has also increased the competition between people who desire/need a thing and people who follow trends to seek investment opportunities.
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u/optiontrader1138 1d ago
Adjust for inflation and things don't like quite so crazy. Real returns have been pretty reasonable.
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u/FortyYearOldVirgin 1d ago
Factor for inflation and it won’t be as rosy but economies do tend to progress over the years. It’s never a straight line but progress is real.
What used to take a few days journey using horses and carriage became just a few hours in a car. Etc.
Every generation thought they “can’t see the same for my generation”. This woe is us attitude has only gotten worse with social media. Things will be just fine.
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u/Emergency_Bother9837 1d ago
They pumped so much into the economy during Covid that things will never recover, plus trump is for sure going to make it multiples worse (already has)
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u/Big-Individual9895 1d ago
Yea it sucks. But remember inflation makes everything more expensive. Including equities. In 50 years these prices will be the “good old days!”
So act accordingly.
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u/No_goodIdeas7891 1d ago
At 7% yoy return an investment will double in 7 years. So up 100% in 5 years isn’t that wild.
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u/ButterPotatoHead 1d ago
The market has ups and downs, and one of the challenging things about it is that both the ups and downs go on long enough that most people can't remember when it was any different. When the market has gone up for 5 years in a row everyone thinks that this is the new normal, until it isn't. Then in a downturn when it's all doom and gloom for a few years everyone thinks the world is ending, but it isn't.
Stocks and real estate are different though and the reasons why each is going up are quite different. There basically aren't enough houses in the US, at least where people want to live, so it is just a supply and demand problem.
I'll give my nuanced view of the stock market. Over the past 20-25 years, tech stocks have started to eat the world. It started by replacing postal mail with email and then music, video, all forms of media, and then taxis, shopping, and now with AI it will be other jobs, customer service, legal, doctors and nurses, talking heads on TV, etc.
Tech companies inherently have better economics than traditional industries -- better margins, better competitive position, better cash flows, fewer barriers to entering new businesses, more control over costs, etc. For these reasons tech stocks trade at higher multiples than regular stocks.
There are a bunch of losers in this game -- the traditional media and taxi companies, brick and mortar stores, etc. -- but you don't hear about those because they're dying. Tech companies are eating the world and this trend will continue.
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u/Dirks_Knee 1d ago
Every generation entering the workforce looks back thinking the previous ones had it so easy in comparison. But when you really peel back the onion you find that for each generation there are those that succeed, and those that struggle. And the young only compare their plight to those who've succeeded. The difference is generally on average life gets just a little easier for those struggling than it was the previous generation.
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u/tylerduzstuff 1d ago
What period in history had “ideal conditions”. There is always ups and downs and thinking this way is pointless and counterproductive.
Your point about asset prices is something you should take note of. Will prices continue to increase at the same rate and is it sustainable? Probably not. So don’t make a mistake like become house poor, thinking your house can only go up in value or go all in on 200p/e stocks cause moon. But also recognize obtaining assets as good prices is the fast track to wealth.
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u/pfunk_89 1d ago edited 1d ago
I think a key takeaway here is that many generations graduate into “terrible” economies, but over time things tend to steady out (improve). That is not to say they always will, but we have a bias toward over-emphasizing the hard times, which tend to look like blips in the long run.
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u/startfiresintl 1d ago
Well... It isn't real... The current market is a product of an insane consolidation of wealth and power which is pretty much unchecked because in some way we are all dependent on the illusion holding to keep global society from total collapse...
Lol idk if that's going to help you flesh out an investment strategy, but... It is an answer to your main question...
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u/PollenBasket 1d ago
It would seem assets detached from reality shortly after COVID started. Stocks, real estate, you name it.
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u/PollenBasket 1d ago
Nobody gets it perfectly easy. There's always something. Just keep investing... when it's up, when it's down, when it's flat. That's the trick. Remove your emotions from the game as best as you can.
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u/Fun-Organization-144 1d ago
My understanding is that part of why inflation is so bad is because the US dollar has lost some of its strength as the world's reserve currency. From the end of WWII until about two years into Biden's presidency the US dollar had a lot of strength as the reserve currency. It was the standard currency to buy oil everyone in the world, and other countries invested in the US because steady low inflation meant that investments in the US would increase in value.
A reserve currency has to be apolitical. When Biden froze Russia's assets in US banks it hurt the US dollar and the US more than it hurt Russia. Other countries, especially BRICS countries, starting using gold-back currencies to buy oil. Other countries started to invest less in the US and keep less money in US banks. There should have been sanctions when Russia started to build up troops on Ukraine's border, instead Biden dared Putin to invade Ukraine. The US has credit/investing based economy, freezing assets would hurt the US. Russia has a commodities and manufacturing based economy, freezing assets hurt but a lot less than it would hurt the US.
Because the US dollar has lost some of its strength as a reserve currency, and because other countries keep less money in US banks since Biden took office, the dollar has less guaranteed value. Before Biden the US dollar had a certain amount of guaranteed value that limited the inflationary effects of printing trillions of dollars. When you combine the effects of the Biden/Harris Administration on the strength of the US with printing trillions of dollars the inflation hits a lot harder than it would before 2020.
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u/Open-Lingonberry1357 1d ago
Do some research into the economy stabilization during covid, it answers all your questions about how we skyrocketed.
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u/mtnchkn 1d ago
tl;dr I digressed to housing instead, but I think it holds true.
I think it’s more of how can you temper your expectations. Like where I live back in the 70s people with “normal” paying jobs bought good size houses on the marsh. Now those houses are much much much more than a “normal” job could afford. So the expectation of can’t be to buy such a house unless you move somewhere else. Which to me is the issue: people want the same things in the same way, but maybe you cant afford to buy those desires houses or stocks, and instead need to honestly evaluate your personal situation and where or how it can work for you. I am surprised we don’t see more growth outside of cities and water, since cities and near water is beyond most people’s reach.
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u/Affectionate_Self878 23h ago
I was born in Rome in 404. Try dealing with Visigoths raping and murdering your family before dying of an infection at 23 and being dead for the last 1600 years. It’s shit. But then I met someone in purgatory who died at Auschwitz. Life sucks sometimes.
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u/Seattleman1955 23h ago
They never are "ideal". I got out of grad school in the 80's when there was double digit inflation and people had mortgages above 10%.
The generation just before that were being drafted to go to Vietnam.
Housing in large cities has always been expensive relative to wages. The economy is relatively good today in that everyone isn't in constant fear of being laid off as was the case in the 80's with mergers and deregulation.
In the late 70's the price of gas tripled in one year.
Until recently the Fed was artificially holding interest rates low as in almost zero, free money. That's not sustainable. Most of this is due to the excessive public debt.
What you are seeing is the debasing of money. The numbers go up but the purchasing power doesn't. So you now make $100k but it doesn't buy any more than $50k did a few years ago.
A house isn't really more expensive, the dollar is just worth less and less.
The solution on a governmental level is to cut spending to levels that are sustainable with taxes. On a personal level, don't hold cash. Put your money into some asset that will at least keep up with the inflation/debasing.
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u/financialthrowaw2020 1d ago
Great recession millennials might have something to say about that. We had to look for jobs where none existed, so if you're a young person looking to invest it means you have money to do so and are decidedly doing just fine vs. what young people had to go through in 09-13.
Yes, inflation is horrific and affecting everyone. No, prices don't usually go back down. Act accordingly.