Why is the US stock market so lucrative?

[Anonymous]

Anonymous wrote:No one has given you the simple answer.

It's because the economy has been doing well and it reflects in the value of the company's revenue.

Think about it long term. If you're a fortune 500 company, in order to keep up with inflation and costs, they always increase their prices to their clients. That increased revenue / profit is why their stock value goes up.

The economy is absolutely not doing well. Literally all of the US stock market growth in 2025 was driven by AI companies and AI hardware suppliers which are a house of cards that will eventually collapse, the only question is when.

[Anonymous]

Anonymous wrote:Why is the US stock market so lucrative?

Why is the average historical stock market return so much higher than historical GDP growth?

If market return exceeds GDP growth, then market capitalization continues to climb relative to GDP.

Currently, the ratio of market capitalization to GDP is over 200%. Can this ratio continue to go up forever? If yes, why?

Intuitively, it seems like long-run market returns must equal long-run GDP growth.

[Anonymous]

Anonymous wrote:Because we are an ultra capitalist country. We celebrate those who have succeeded and hide this who "failed"

I spent a year in Ivory Coast. Americas propaganda is real. Sure Ivory Cost is a very poor country. But some part of DC and Maryland are as run down as some of the poorest neighborhoods I saw in the capital city there.

This is just false. Stop with the lying.

[Anonymous]

Anonymous wrote:

Anonymous wrote:No one has given you the simple answer.

It's because the economy has been doing well and it reflects in the value of the company's revenue.

Think about it long term. If you're a fortune 500 company, in order to keep up with inflation and costs, they always increase their prices to their clients. That increased revenue / profit is why their stock value goes up.

The economy is absolutely not doing well. Literally all of the US stock market growth in 2025 was driven by AI companies and AI hardware suppliers which are a house of cards that will eventually collapse, the only question is when.

Sigh . . . the economy is mostly but not fully doing quite well. AI is a part but just a part. The top 60% for the most part are doing well.

[Anonymous]

Anonymous wrote:It's the ultimate ponzi

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one has given you the simple answer.

It's because the economy has been doing well and it reflects in the value of the company's revenue.

Think about it long term. If you're a fortune 500 company, in order to keep up with inflation and costs, they always increase their prices to their clients. That increased revenue / profit is why their stock value goes up.

The economy is absolutely not doing well. Literally all of the US stock market growth in 2025 was driven by AI companies and AI hardware suppliers which are a house of cards that will eventually collapse, the only question is when.

Sigh . . . the economy is mostly but not fully doing quite well. AI is a part but just a part. The top 60% for the most part are doing well.

The Economy is not doing "well" what planet do you live on?

Unemployment is rising fast, Inflation as well. The $ is crashing, our National Debt is rising at an exhorbement amount ......
Go take Econ 101 and get back to the people with brains.

[Anonymous]

401K money. Where would they go?

[Anonymous]

Because we have the strongest military. We can impose our will on others.

[Anonymous]

In case no one here has a modicum of actual market acuity, international markets have been dominating everything in the last year. The MSCI South Korea is up an insane amount. Everyone knows why, so I don’t need to tell you, unless you are firmly ensconced in Fox News all days, which means you eat crayons and can’t think for yourself. Either way, I’ll throw you cucks a bone. Buy EWY or even KORU while tariffs are in effect on South Korea and it’s down. I’m sure by next week they will be gone and those ETFs will continue their upward trend.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one has given you the simple answer.

It's because the economy has been doing well and it reflects in the value of the company's revenue.

Think about it long term. If you're a fortune 500 company, in order to keep up with inflation and costs, they always increase their prices to their clients. That increased revenue / profit is why their stock value goes up.

The economy is absolutely not doing well. Literally all of the US stock market growth in 2025 was driven by AI companies and AI hardware suppliers which are a house of cards that will eventually collapse, the only question is when.

Sigh . . . the economy is mostly but not fully doing quite well. AI is a part but just a part. The top 60% for the most part are doing well.

The Economy is not doing "well" what planet do you live on?

Unemployment is rising fast, Inflation as well. The $ is crashing, our National Debt is rising at an exhorbement amount ......
Go take Econ 101 and get back to the people with brains.

Inflation year-end 2024 was 3.75%, for year-end 2025, 3%. So not rising.

Unemployment has edged up a bit. 4.1% year-end 2024, 4.4% year-end 2025. So not rising "fast."

[Anonymous]

Anonymous wrote:We are a society of consumers and easy and cheap crecdit make it so everyone can be an uber-consumer. But it has its consequences.

"Average Balance: As of late 2025, the average cardholder carries a balance of approximately $6,700 to $7,900.

The "Revolving" Gap: For the roughly 49% of households that carry a balance from month to month, the average debt is much higher, sitting at $11,413 (up about 4% from the previous year)."

I got into this trap of easy credit. I had high credit limits after my divorce and ended up raking $65K of personal CC debt and then car loan on top of that. This is when I only make $60K/year. I need to get a second job because the interest is killing me. It is all my fault.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one has given you the simple answer.

It's because the economy has been doing well and it reflects in the value of the company's revenue.

Think about it long term. If you're a fortune 500 company, in order to keep up with inflation and costs, they always increase their prices to their clients. That increased revenue / profit is why their stock value goes up.

The economy is absolutely not doing well. Literally all of the US stock market growth in 2025 was driven by AI companies and AI hardware suppliers which are a house of cards that will eventually collapse, the only question is when.

Sigh . . . the economy is mostly but not fully doing quite well. AI is a part but just a part. The top 60% for the most part are doing well.

The Economy is not doing "well" what planet do you live on?

Unemployment is rising fast, Inflation as well. The $ is crashing, our National Debt is rising at an exhorbement amount ......
Go take Econ 101 and get back to the people with brains.

Inflation year-end 2024 was 3.75%, for year-end 2025, 3%. So not rising.

Unemployment has edged up a bit. 4.1% year-end 2024, 4.4% year-end 2025. So not rising "fast."

And, the S&P rose 18% in 2025, the NASDAQ was up 21%, the DJIA was up 14.9%, and the Bloomberg U.S. Aggregate Bond Index returned 7.3%. Those are not the hallmarks of a problematic economy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are a society of consumers and easy and cheap crecdit make it so everyone can be an uber-consumer. But it has its consequences.

"Average Balance: As of late 2025, the average cardholder carries a balance of approximately $6,700 to $7,900.

The "Revolving" Gap: For the roughly 49% of households that carry a balance from month to month, the average debt is much higher, sitting at $11,413 (up about 4% from the previous year)."

I got into this trap of easy credit. I had high credit limits after my divorce and ended up raking $65K of personal CC debt and then car loan on top of that. This is when I only make $60K/year. I need to get a second job because the interest is killing me. It is all my fault.

You're correct, but recognizing the problem is a positive step forward towards addressing it. You can do it, with time and discipline. Good for you.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Why is the US stock market so lucrative?

Why is the average historical stock market return so much higher than historical GDP growth?

If market return exceeds GDP growth, then market capitalization continues to climb relative to GDP.

Currently, the ratio of market capitalization to GDP is over 200%. Can this ratio continue to go up forever? If yes, why?

Intuitively, it seems like long-run market returns must equal long-run GDP growth.

I posed the question above yesterday. I have never understood how the long-run stock market return can exceed average GDP growth. Can this continue indefinitely? I don't understand how. Aren't stock returns (in the long-run) limited to the rate of GDP growth?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:No one has given you the simple answer.

It's because the economy has been doing well and it reflects in the value of the company's revenue.

Think about it long term. If you're a fortune 500 company, in order to keep up with inflation and costs, they always increase their prices to their clients. That increased revenue / profit is why their stock value goes up.

The economy is absolutely not doing well. Literally all of the US stock market growth in 2025 was driven by AI companies and AI hardware suppliers which are a house of cards that will eventually collapse, the only question is when.

Sigh . . . the economy is mostly but not fully doing quite well. AI is a part but just a part. The top 60% for the most part are doing well.

The Economy is not doing "well" what planet do you live on?

Unemployment is rising fast, Inflation as well. The $ is crashing, our National Debt is rising at an exhorbement amount ......
Go take Econ 101 and get back to the people with brains.

Inflation year-end 2024 was 3.75%, for year-end 2025, 3%. So not rising.

Unemployment has edged up a bit. 4.1% year-end 2024, 4.4% year-end 2025. So not rising "fast."

And, the S&P rose 18% in 2025, the NASDAQ was up 21%, the DJIA was up 14.9%, and the Bloomberg U.S. Aggregate Bond Index returned 7.3%. Those are not the hallmarks of a problematic economy.

To the prior PP's point, much of that gain is due to the Mag 7 (not even including other AI stocks). From Google's AI:

The Magnificent Seven stocks (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, Tesla) have driven a massive portion of S&P 500 gains, recently accounting for over 60% of positive performance in key periods. These seven companies represent roughly 34%–36% of the total S&P 500 market capitalization as of late 2025, up from ~12% in 2015.

If they experience a correction . . .