The house is invested in keeping stock prices stable and rising, and it is not a good idea to bet against the house.
It’s really really hard as you get older and your hopefully accumulated savings are high relative to your current income and your expected remaining working life earnings.
In your 20s you can ride up a bubble, lose it all, and chalk it up to a cruddy learning experience. Later in life it gets exponentially harder because mistakes are permanent and irrecoverable. You can play the game and risk it in what seem like expensive assets. Or you can sit it out and fall behind without any compounding to create wealth and offset inflation. The latter option isn’t really an option unless you start with so much wealth that you can just spend down principal being eroded by inflation year after year and still have enough.
Good luck!
The problem with the future though is wide systemic problems vastly unlike seen previously. The US population will get smaller as the baby boomer generation is larger than its successive generations. That’s almost the definition of negative market growth and in some cases (health care) it is. That also looks like what Japan has undergone for the last several decades.
Climate change is a whole other bag of large systemic change likely to increasingly play out the younger the investor is.
My point here is the future 50 years will not be as rosey as the last 50 years. And the last 50 years haven’t been exactly rosey.
Edit-my proscription would be: people, not just investors, need to be willing to put in a lot of work and potentially ever increasing work into anticipating and acclimating to the world that’s headed our way. Study up on macroeconomics, micro, portfolio theory, some climate and migration patterns, and how your governments and institutions work. Maybe then you have a chance at survival. Also look for ways to make not just your life better but the conditions for life better for your neighbors, family, and future generations. Resist “tearing down the wall keeping the century-high tide away for the sake of a few pennies a brick.” Resist tearing down “the other” because while it might feel viscerally satisfying it actually creates an environment of prosecution and suffering that you will eventually suffer. Embrace the struggle of survival because it’s what we the living must do.
And all that money the boomers have accumulated, at least what they don't blow before dying, is going to be inherited. And the heirs are going to invest it, and the government is going to force them to spend it (or at least have it taxed) within 10 years of inheriting it.
No idea what effect this will have, but as usual, there are a lot of moving parts so it's hard to say how things will turn out.
Yes I know there have been ups and downs, but nothing remotely like the utter existential devastation that would randomly strike previous generations. Just take a good look at any 80 year period prior to WW2 and compare it to the post war period. The difference is stark.
That's not really accurate - the goal of the Fed and all central banks is to keep prices stable and employment levels optimal. If inflation is going out of control then prices won't be stable and employment won't be optimal, in such a case the stock market might have to take a hit. Also, it's pretty clear most central bankers understand the current inequality level is not good.
The only problem is that the fed really doesn’t have much more it can do. Interest rates are too low right now and the market can easily lose faith in the Fed which means utter chaos could occur and deflation will run rampant.
The entire edifice of the global financial system is anchored around real estate valuation (the dirt, not so much the improvements and not so much the price) and the network effects wrung out of it by the infrastructure accreted around it (most often paid by public taxation and the bulk of its monetization privatized), only made possible by the structural support embedded into credit finance, accounting and tax policies granted it as an asset class unique unto all others. There can be temporary price corrections, even deep ones, even lasting as much as a generation or two, but at this point so much is secularly bound to real estate valuation that it is one of the pins on the OR-gated-multi-pin hand grenade of single-planet-forever-growth economics.
Real-estate-the-dirt valuation is like the core tranches and/or core dynamic allocation strategy of one's investment thesis/theses, or the ballast in a ship. Forex dwarfs real estate as both a market and asset class, but policies do not treat forex as favorably over the long-term and in credit structures.
Also, for those who feel hard real estate market data (including visibility into contract terms) is opaque and inscrutably difficult to obtain, you're in for a treat when you get into the forex market (or for that matter, bonds, derivatives, etc.); pricing data is only the tip of the iceberg, and uniform cross-exchange visibility into order books is not seriously available in those markets the last time I investigated trading each of them (would love to be pointed in the right direction if I have my information wrong, though).
Depending upon how one models it, residential housing prices are like a second or third derivative off of the above opinionated, personal take on the key interrelationships with my embedded biases/prejudices/blindsights.
Once the first two tiers of Maslow's hierarchy are secured functionally into perpetuity at a stable "price", if I had to choose between putting wealth into dirt or into technological advancement to improve our mastery over energy (information being a valuable subset of energy), matter, and spacetime (solving distribution problem spaces being a valuable subset of spacetime), I'd choose the latter every time. In my personal opinion (YMMV of course), as a species we've sufficiently implemented the hypothesis that technological advancement is key to ever-improving conditions for the majority, such that it is worth at maybe a plurality subset of the species seeing where that path leads.