Almost daily (sometimes multiple times a day) I make it a habit to scan several financial websites, blogs and major news publications for a sense of what’s going on in this turbulent financial world of ours. Now I don’t necessarily rely on this information or consider it definitive for more reasons than I care to write about.

I’m of the mindset that if something’s already become national/international news, most of the money has already been scooped off the table and the players have moved on to something else.

The reason I do however like to read these publications is a) it’s entertaining to see how markets ( i.e. people ) react to news and b) it gives me a history of recent data and some semblance of which patterns and decisions are likely to occur going forward. History does have a funny way of repeating itself.

The wonderful thing about certain types of real estate is that it typically moves through very slow cycles. Normally “things” don’t just suddenly happen, they take months or even years to materialize. Even with the recent housing bubble in the US, there were many people calling for reform and amendments to the onerous lending laws well before the party ended, some paid attention, many more just chose to ignore the warnings.

There was an article that I read earlier today that motivated me to contribute to this blog,  US STOCKS –Massive rout spells trouble for wallstreet.

In the article, the author goes on to say that the S&P 500 has officially gone negative for the first time this year and how there are 4 stocks dropping for every 1 stock going up in value. All true statements.

I would however like to approach this conversation from another perspective. The Long-term. Many advisors are very adamant that investing in a well diversified portfolio will lead to a successful outcome in the “long-term”. Taking this statement one step further, I thought to myself...well the S&P 500 is essentially a “well diversified” investment in of itself ( 500 large cap stocks )...so that being said what has the S&P500 done in the long-term?

 I went to Google Finance to find out.

 If you stretch out the S&P500 to years, this is what you will find

What does it all mean? According to Google Finance if you had invested $100,000 in August of 2001, in August of 2011 you will have had approximately $104,000.

4% growth over 10 years. That doesn’t even include the fee’s that the average person pays on their investment accounts nor does it even begin to factor in inflation. The harsh reality is, despite the “dollar number” appearing close to the same as 10 years ago, the actual value of our money is less...much less. Try buying the same amount of groceries for $100 today as you did 10 years prior.

It’s almost not fair to compare the stock markets performance to your personal homes appreciation or a well selected piece of investment property during that same timeframe. If you’ve bought almost anywhere in Canada in the last 10 years you know exactly what I am talking about.

Now I’m not implying that you cannot make money in the stock markets, many clearly do. Rather, for the everyday person working and trying to raise a family, assessing the markets or attempting to find people capable enough to do it for you can very easily gto ouy lal mxeid up.