By Emily Sperling, Bloomberg Businessweek • A year ago, we were in a different time, but today, we’re still living through the same cycle.
The stock market is reeling from the first significant collapse in over two years and investors are wondering: What can we do to make the economy work?
The answer, according to a group of academic economists, is simple: Put money into the economy.
The answer is not only to reduce risk but also to boost economic activity.
The problem is that most of us are in the habit of saving and investing to make sure we have enough money to keep going for decades to come.
But that’s a mistake, says John Bogle, the founder of Vanguard Group.
It doesn’t take much to get a stock market that goes from being a “gimmick” to being a financial product that works, he says.
“The key is that you have to get the right balance between saving and saving and reinvesting in the economy.”
The market is not working, but it can’t be fixed The most obvious reason to save for retirement is to be able to put money in the market once a year and not have to worry about it for a decade.
It also makes sense for businesses and individuals to invest in the financial system, as long as they don’t take on too much risk.
But the problem is the stock market isn: the most obvious way to put the money in is to invest it, rather than to keep it for yourself.
And it’s not working.
The S&P 500 is down more than 6 percent this year, from a peak of 1,000.4 points a year ago.
The Dow Jones Industrial Average has lost more than 11 percent since the beginning of 2017.
That’s not to say that the economy is in good shape.
The jobless rate is at a 15-year low of 7.9 percent, and the unemployment rate for those who are part of the workforce is more than 10 percentage points higher than it was when the recession ended in 2009.
But if you want to have a long-term outlook, Bogle says, the stock-market boom was a mistake.
The economy is working, he said, but the stock prices are not.
The reason for that is simple, Bose said.
“There’s no reason to be invested in the stock economy, to buy the stock,” he said.
Investors are too focused on the stock index.
They buy into the idea that stocks are like cash or bonds.
It’s the right price, the right dividend, Bomer said.
And that’s why so many investors are making the mistake of investing their money in a stock-index fund instead of in a retirement account.
This has resulted in a large financial gap between the wealthy and the poor.
That gap is also fueling the worst cycle of the modern economy.
Bogle and others believe the next step should be to invest more in the middle class.
Bose points to the U.S. Social Security retirement program, which pays out more than $100,000 a year for people earning $100 or less.
The same amount of money can be paid to people earning more than that.
This is a way to ensure that the next generation gets a larger share of retirement benefits.
Bomer also believes the U-verse strategy that Bogle calls “diversity investing” could help.
That means companies can offer benefits to their employees who are white and men.
And the idea is to pay out benefits that are based on performance rather than the market price.
BOMB: I think we’re on the right track.
It was a great start But that doesn’t mean there is room for further growth in investing, Bovey says.
Bower’s idea of diversifying has been around for years, and it is working.
He estimates that the UBI could pay for itself within the next decade.
He’s already heard from more than 1,100 people in the United States who say they want to buy shares in the Ubi, including a couple who are considering it.
That number is growing, and that’s because Boveys idea of investing in the future is growing.
That is, Bomey is betting that there will be an economic boom and that the economic recovery will be stronger than what has happened in the past.
Bovely and his fellow economists see that coming sooner rather than later.
BOREYS INTELLIGENCE INTEACHING THE NEXT GENERATION: By 2018, Bower hopes to have 100 of his colleagues participating in the conference, and his group plans to hold its first meeting in 2019.
He expects the next cohort to be the most diverse group of academics and researchers in history, he believes.
BOSTON: The next generation is going to have to learn from the mistakes of the past and they will have to make their own mistakes, Boren said.