On: Frugality Is Non-Linear (2019)

[whatever1]

If your 401k was in the average European stock market since the 2000, today you would have the same money minus the inflation. The GDP of Europe has increased the last 20 years, yet the stock market did not.

[occamrazor → whatever1]

Which index? The DAX is above 12000 now and never exceeded 8000 around 2000. And this does not even include dividends.

[whatever1 → occamrazor]

Check the stoxx 50 index to get an average view of the european industry. It has been flat for decades. If you go to particular countries the image is much much worse. For example if you had your money in the Italian stock market since 2000, by now you would have less than half (inflation not accounted).

[catern → whatever1]

That's really interesting. I wasn't aware of this. Thanks for sharing this.

Stock indices ideally approximate taking a share of "the whole economy". What's your explanation for why this (seems to) not work in Europe?

[whatever1 → catern]

Probably because we give all of our money to our govs to manage, so no free cash for us to play in the "predict the most profitable company" casino.