The One Thousand (1000) Shares Post - More Gloom and Doom

There has been much yee-hawing in this past two weeks about the economy starting to recover. Again, nothing could be further from the truth. This is, quite simply, the Barrystream Media protecting their Messiah. Our media is corrupt, our government is corrupt, and our President is decidedly anti-wealth.

The new meme from the media has been to tout this past April as THE BEST April on record since 1938 for the S&P 500. How did they arrive at that conclusion? Because the S&P 500 gained more (percentage-wise) than in any April since that time. However, the percentage is only ONE metric of the actual VALUE of the S&P 500.

Lemme explain.

This is the graph from April 2009 for the S&P 500. You can plainly see that the S&P gained 61.73 through the month. This represents a percentage gain of 9.29%.

If you take into account ONLY the percentage gain, it is a VERY good month. Honestly, I did not go back to past 2005 to check further because I disproved their statement by just LAST April. BUT! From all I found, they could be right as far as PERCENTAGE gain.

But let's look at the money, because MONEY is ultimately what we desire to MAKE when we invest, not PERCENTAGE. If you assume that you hold ONE SHARE of an S&P index fund that is rigidly tied to the gain, you made 61.73 dollars throughout the month. That is what that percentage represents. Not bad, that is one meal at a nice restaurant.

But. Most people do NOT invest in index funds for a single month.

Over the course of the last year, ending at the end of April, the S&P is DOWN 442.41 or a grand total of 33.64%. That has nothing to do with what "they" said about April though, I just threw that in there, for reference.

Here is April 2008. You can plainly see that last April we only made 6.28% on our investment, so this year we made 3.01% MORE money, right?

Not exactly. You also notice that the S&P GAINED 82.62 points last April, so we made 82.62 DOLLARS. That is 20.89 MORE than we made this year. Thirty-three percent MORE MONEY.

Now, which month was better? April 2008 or April 2009?

Yeah, I thought so.

One more thing, what do you think that all the spending is doing to our currency? Yep! The low of 2009 is kinda making Standard and Poor rethink the VALUE of our money. Who is Standard and Poor? Yep, the very same folks that put together the S&P 500.

Please take the time to comment.