I own BTC and actually it’s done quite well since March up over 379%. I didn’t buy at the low but I’m up 285% on my latest purchase of BTC and 400% on ETH. Most people will respond that BTC is sooo risky and it does have risk, but this isn’t an article on BTC, it’s an article on framing the risk of passive investing.
I’ve written a lot about this. I don’t think most people really get the danger they are in or actively choose to ignore the risk. When we look at how the stock market has behaved since the March crash, stocks have virtually erased the losses. The QQQ is up 25% and the SPY is up 5% YTD but the economy is still in recession barely up from depression. Unemployment is still out of control and businesses are going bankrupt all over the place. The dollar has switched from strong dollar to weak dollar ushering in real inflation, so economically we are in a period of stagflation, the scourge of the 1970’s. If we’re in stagflation (there is no if about it) how can the market be up for the year?
This video by George Gammon tells the tale. The difference between “then” and “now” is passive indexing. Vanguard was a tiny little fund created in the late 70’s. Today Vanguard, State Street and Black Rock own half of the market. That’s what’s changed and why there is a disconnect between the video game we call the market and the true economic reality.