TL;DR

The S&P 500’s doubling is mostly inflation-driven illusion, not real economic growth. History shows such bubbles always pop, leaving many investors poorer.

Story

The S&P 500 almost doubled since pre-COVID? Sounds amazing, until you remember the fine print.

It’s like a magic trick where the sleight of hand is inflation. The numbers go up, but your purchasing power? Not so much. They’re selling you a story of growth, but what’s actually growing is the distance between the rich and the rest of us.

This isn’t new. Remember 2008? The housing market bubble? Same song, different verse. Easy money, inflated assets, then poof—the house of cards collapses. This time it’s stocks, fueled by COVID-era stimulus that created a massive influx of cash, which in turn drove up valuations in a way that didn’t reflect the actual economy. So, while the P/E ratios might seem sensible at first glance, they’re easily manipulated by this influx of cash.

The human impact? Millions of average investors are watching their savings not only fail to keep up with inflation, but also likely decline in value, leaving many feeling lost and vulnerable. While some might have profited handsomely from these inflations and gains in the market, many more are struggling to keep afloat during these uncertain economic times. Those who got in early often leave those who got in later holding the bag.

Lesson? Be a skeptic. Don’t trust what the headlines say. Don’t confuse stock market gains with real growth in the economy. And above all, don’t risk more than you can afford to lose. Because this isn’t a new trick—it’s the oldest trick in the financial book, and history is full of those who got burned while believing that ’this time is different'.

Conclusion: The market’s near doubling is a symptom of financial manipulation, and a classic example of how easy money fuels bubbles that always eventually burst. Don’t be the sucker at the end of the line.

Advice

Don’t chase returns. Diversify your investments, only invest what you can afford to lose, and understand the risks.

Source

https://www.reddit.com/r/stocks/comments/1ml4j0p/sp_500_is_now_almost_double_what_it_was_precovid/