

Right, and I can see that. But if you back out that line graph over a longer period of time, this dip would be miniscule compared to the overall upward trajectory. If the Y Axis tracking the market starts at 0 (which it wouldn’t I get that, but go with me here) and the X axis tracks time and we set it to say, a 3 year period - then the result is that the line has exploded upwards. The tiny tip at the end which represents the last 6 months barely registers. The average closing price in 2023 was 34,121. The close today was 42,454. So even if the market has dropped significantly in the last few months - it’s 25% higher than it was 2 years ago.
Again, I trust that people know what they’re talking about. I am certain I do NOT know what I’m talking about. I am not saying I don’t believe them, or that I’m right - I just want someone to explain the factor I’m missing. I have theories, but no way to confirm them because I lack the base knowledge to even phrase the question right.
Is the stock market supposed to have a “default growth” element that we have to account for? Like, is the fact that the market twice as high as it was 3 years ago an illusion because constant growth is just a necessary element of the market functioning at all? Does that default growth make longer timelines less useful as comparative tools?
Or is it that more that the market was projected to grow and then shrunk instead, so the relevant comparison isn’t to history, but to projections, which is why even a small dip seems more catastrophic? Because it was supposed to continue skyrocketing.
Or am I asking the impossible? Does gaining context for the larger momentum of the stock market take a degree in finance and by asking for someone for a simple explanation I’m just further showing my ignorance?
Ah ha - I see, we’re talked over each other a bit but I think I get it now. You have to adjust for the assumed 7% in growth that would be considered “standard”. We’re not really at -2%, because we should be aiming for +7% at minimum. Which means the short fall is more than 4 times what it appears to be to my layman ass. I think I get it.