Anyway back to the stock market. You can certainly pick "safe" stocks to put your money in and get a 5% return in dividends but the trouble with the stock market is the volatility of the market. If you have $5,000 in a bank when you go to draw it out you will have at least $5,000 plus interest. If you have $5,000 in the stock market and go to draw it out you may get $4,500 to $5,500 you don't know and you don't always have the option of picking the time to sell "high". It has been my experience when you need the money and go to sell stock the market will always be down.
Certainly if I was in my Forties I might think what is going on would be great as you could afford to borrow money and buy stock or borrow money and buy a house etc. but as a retiree I need to rely on safe, conservative financial options that provide an income stream or protect my money for when I need to become liquid in an instant. The stock market is part of that investment plan however Certificates of Deposits for a retiree is even a higher part of the investment plan.
Who does this Federal Government propped up of the stock market help the most - it certainly isn't me with less than $10,000 in it. It is the CEO's with stock options and those large corporations the Federal Government bailed out with my money.
I, like millions of others, have tried to do what I felt was right during my life time. I tried to keep a job, I saved when ever possible, I tried to set an example to my children, I didn't steal from my employer, but yet the Federal government, The state of Delaware and the Delmar government just keeps spending money and maintaining a debt that is just unbelievable. The Federal reserve near zero interest rate policy is just a tax on people who save and retirees. Obama is counting on people who save and "do the right thing" as being responsible people and will not create a riot. The good thing about responsible people are; they vote and maybe we will get his ass out of office this time.
"Americans who have done everything right, have worked hard, saved their money and stayed out of debt are the ones being punished by low interest rates," says Richard Fisher, president of the Federal Reserve Bank of Dallas and a voting member of the Fed's policy-making open market committee. "That state of affairs is not sustainable for a long period of time."
Retirees spend a lot of money on "non-essential items" items, but with the zero-interest rates I and others like me have cut back on a number of those items. Every time I go into savings to make up the difference in the food and gasoline bills I spend less on or don't even consider dining out, buying another car, or taking a vacation. The government may have meant for lower interest rates to stimulate growth but for the retiree section of the population, it does not feel safe to spend the cash they have on hand.
So are you better off today than you were four years ago? Hell No.