TL;DR

The market’s down 27.5% in real terms, almost matching 2022’s total drop. Inflation’s eating your returns – are you watching the right numbers?

Story

The Nasdaq 100, adjusted for the sinking euro, is down 27.5% since February. That’s eerily close to its total 2022 loss of 30%. This isn’t a crystal ball, but it’s a chilling reminder of how fast fortunes evaporate.

Like a rerun of a horror movie we barely survived, markets are flashing red again. Remember the pain of 2022? Think plunging portfolios, shattered dreams, and the gnawing feeling you’d been played. It wasn’t long ago. It could happen again.

Here’s the rub: inflation is eating away at your gains like a silent termite infestation. While the market might look flat, the real value is shrinking. Think of the 1970s – a decade of so-called “stagflation” when nominal stock prices masked the real rot underneath.

The mechanics are simple: rising prices erode buying power. Your $100 investment might look the same, but buys you less. That’s the silent killer. The 2022 downturn, while painful, was a swift jab. This decline feels more like slow poison. Don’t fool yourself – real returns, not nominal ones, are what matter. Those ‘gains’ you think you’ve made? They might be an illusion.

History is full of these traps – 2008, the dot-com bubble, Enron. The names change, the greed stays the same. Learn from the past or be condemned to repeat it. The warning signs are there – but are you looking? ‣ Nominal Returns: The return on investment before adjusting for inflation. ‣ Real Returns: The return after factoring in inflation. This is the true measure of profit. ‣ Stagflation: A toxic mix of slow economic growth, high inflation, and unemployment.

Advice

Don’t trust nominal returns – they’re a mirage. Look at real returns, factoring in inflation. History repeats – ignore it at your peril.

Source

https://www.reddit.com/r/wallstreetbets/comments/1k56axu/in_real_terms_were_very_close_to_the_full/