It was my son, Ethan’s Bar Mitzvah this past weekend. He did amazing. He did a wonderful job chanting Torah and at the party, he actually sang a song with the band! When I told him I thought he did great he said, “Dad, I was a rock star.” During one quiet moment at the party, a friend came up to me who is a practicing attorney and he asked me the following question, “the stock market hits an all-time high, S&P 500 at 2,000 points, DOW Jones over 17,000. How come as working Americans, we don’t feel wealthy?” I said to him, ‘let me tell you why you don’t feel wealthy’. The table he sat at suddenly became quiet and everyone listened in. I then realized 2 things, I could not answer the question politically, as we had members of the Republican, Democratic, and Libertarian party at the table and also I made a promise to myself to not bring politics into financial discussion during social gatherings.
The first answer is that there is a disconnect between Main Street and Wall Street because we can’t see beyond the cost of goods at the checkout line. Jobs are coming back but they are mostly low paying jobs (a lot of companies have traditional higher paying jobs overseas). Also, speaking to clients a lot of them are worried about their jobs and do not count on raises. The cost of food and gas have increased dramatically. I do the household food shopping (as the chef at the home I want to buy my own ingredients) and I compare every month and the cost in the last 12 months went up 21%. The cost of traditional essentials is increasing this includes daycare for children, price of water (bottled). We are comparing ourselves to ‘new neighbors’ in Facebook who are posting trips we cannot afford, or should not take. A lot of new restaurants are opening up and we are seeing more close (because of new competition) causing us to fear the economy is doing poorly. This is the traditional answer you would see in the media.
The second answer is that we are actually doing worse on Main Street than Wall Street. The stock market is tied to many different items beyond how well a company is doing. It is tied to interest rates, world policies, micro and macroeconomics, currency rates, robot trading, hedge funds, market makers, federal reserve, and a whole host of other manipulators. Main Street is our street, how do you feel you are doing?