Young Investor’s Wealth Destruction During The Financial Crisis

One thing the financial media gets right (surprisingly) when discussing the behavioral economics of households during recessions is that younger American households “sell low” during periods of distress far more than any other demographic range.

In particular, the white paper “Wealth Disparities Before and After the Great Recession” analyzed the investment behaviors of Americans from 2007-2011 and found that the hardest hit demographic in terms of net wealth over a four-year period was households that involved members in the age 25-34 demographic.

In 2007, the American households that held stock and were in the 25-34 age range had $34,834 in stock market wealth. In 2011, those individuals who were in the 25-34 age range in 2007 had $7,842 in total stocks invested.

Those numbers blow me away. Sure, I’ve seen the anecdotes interviewing people who sell stocks during the recessions and say things like “the stock market is … Read the rest of this article!

Before You Write Wal-Mart Stock’s Obituary

In the 1990s, no stock contributed more to the earnings per share growth rate of the S&P 500 than Wal-Mart stock. It had been an elevator upward delivering 16% annual earnings per share growth throughout the decade, fresh on the heels of delivering 31.5% annual growth between 1972 and 1990. From 2000 through 2012, the party continued, as Wal-Mart grew earnings per share from $1.40 per share in 2000 to $5.02 in 2012. Although the best gains came to Wal-Mart’s early investors, participating in the growth of the business between 1972 and 2012 had been a blessing for any investor that chose to buy Wal-Mart outright instead of investing in something like an index fund.

The past three years have not been as kind to Wal-Mart shareholders. Between 2012 and 2015, earnings per share have exactly come down a bit. Wal-Mart made $5.02 in 2012, and is only expected to … Read the rest of this article!