The most insane chart of the SP500 in the past years!!

Wanna know the most insane thing about the SP500 over the past years? No? Then stop reading! ;) Yes? Cool, then keep going. In case you don’t know what the SP500 is… it is some of the 500 largest companies listed in the US. Here is their chart over the 5 past years. What do you notice?

I helped you ;) I marked the 3 tops… one just before covid in 2020, one of its absolute peak at the end of 2021, when we all were paper millionaires (the amazing times!) and the last one, that just happened over the summer.

Now, what if I told you, they are actually all at the same height.. WHAT? Yep… if you consider money printing aka inflation aka M2-Moneysupply… Check this chart, where the SP500 is measured against M2 Money Supply as some measurement of Inflation:

Mind blown? Jup. What’s the lesson here? A super diversified stock portfolio like the SP500 had a very hard time to outperform money printing, but it still did better than most asset classes.

Here is the slaugther fest of bonds:

Here gold… it literally just held on to its purchase power (graph ends were it started before covid):

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And here Bitcoin… also down massively from its height, but up from when all the insane money printing started in 2020.

How did the SP500 do so well? Actually, it was just about 7–10 companies! They not only totally outperformed all other assets during those years, but furthermore reached new all time highs despite all the inflation:

Ok, but what’s the lesson here? Should you be starting to stock pick? I don’t know what you should be doing, but what I am doing is:

1. Bet on trends I am very familiar with, trying to be right… for example tech or crypto.
2. Diversify on everything else and try not to be wrong.

Atm I am super well diversified over basically all asset classes… My biggest bets over the next 3–6 months is however Ethereum, DeFiChain and Bitcoin… just like I explained yesterday via https://bake.io This is how I hope to outperform inflation atm.

Hope this helps and the chart blew your mind.

Julian

CEO & Co-Founder of Cake Group & Bake — the easiest place to buy crypto and get cashflow on top