There’s No Such Thing as “Easy Money”

Written by: Ryan Bouchey

When it comes to investing, what does “easy money” mean exactly? And why are most market pundits saying that it’s over? I bring this up because I continue to see and hear the expression everywhere and it’s frustrating every time I do. Not only is the expression “easy money” ridiculous, but apparently everyone with an opinion knows that it’s over? Take these common talking points for example: “The era of easy money is ending” or “The FED is tightening, easy money won’t come easy anymore.” The easy money reference isn’t because money is cheap, it’s because they’re saying how easy it was to make money since the economic recovery began in 2009.

Well I’m here to debunk this myth of easy money. I don’t believe in it and neither should you. Since the markets bottomed out in March of 2009, the S&P 500 has been on an incredible rise over the following 9 years – up about 290%, or the equivalent of almost quadrupling your money. Hindsight is always 20-20 so nine years later everyone is raving about the “easy money” that was made– but a brief history lesson shows us there is no such thing as easy money…


                Who was really ready to put their money to work during 2009 as the markets were down close to 60% over the previous 18 months? If you were disciplined you were still invested, but I don’t think many people were jumping in to the markets yelling about easy money.


Just about a year following the start of the recovery we found ourselves in the Greek debt crisis, with markets experiencing a correction (over 10% drop) when we learned Greek bonds had been downgraded to junk status. Soon thereafter the European Central Bank had to bail out Greece, but it wasn’t until November of that year that markets recovered.


In August of 2011, Standard & Poor’s downgraded America’s credit rating from AAA to AA+ setting off not just a correction, but a brief bear market (over 20% drop). Markets didn’t recover until February of the next year.


Talks began of the end of quantitative easing and markets didn’t react too kindly. How on earth could the market continue to go up in a rising interest rate environment?

2013 – 2014

All things considered, relatively little volatility during these two years without any market correction. Not easy, but pretty smooth sailing.


                With the help of falling gas prices and slightly rising interest rates, we had the rare year when both stocks and bonds finished the year in the red. Rarely does this ever happen.


At the start of the year we had China, oil prices and higher interest rates causing a brief correction. In June 2016 we had the Brexit vote and everyone thought the world was going to end. Later in the year Donald Trump won the presidency and many people thought the stock market would never recover.


Geopolitical uncertainties stole the headlines, but we experienced a slow and steady rise in the markets with little volatility and over 20% rise.


This past February saw another correction caused by the fear of inflation and rising interest rates (same fear that caused a sell-off six years earlier). We also have seen volatility as it relates to China and what a trade war could look like.


So as you can see, quadrupling your money if you were purely invested in the S&P 500 seems awfully easy in hindsight, but if you lived through and experienced these past nine years as an investor you know there was nothing easy about it. The key with investing is to have a well thought out, disciplined plan in place because while the results in hindsight may look easy, there is nothing easy about the investment journey. Behavioral factors and fighting your emotions can be the hardest part of the investment process and when you re-live these moments you remember there is no such thing as “easy money.”


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