Here is a question from the world of abstraction:
“If your wealth exists only in theory, then why is your anxiety so real?”
That is the truth of it, isn’t it? Much of our wealth is tied up in those little letters and numbers that fill the stock tables every day. Personal investments. Pension money. All kinds of corporate-employee investment schemes.
But until you decide it is time to cash in, none of it is real.
That being the case, why do fluctuations in the stock market cause so much anxiety?
There is a simple explanation. When the market goes down, it affects our “paper dreams.”
Paper dreams?
Because of the unusual stock market vigor during the past few years, many people have become what the truly snooty rich might call “noveau papier riche,” recently rich, but only on paper, for those who like their bad news in English instead of fabricated French.
Paper dreams exist only in the most optimistic and fantastic of places, somewhere in a person’s head where the financial part that pays attention to wealth on paper is connected to longings and imagination.
Anyone with a healthy bundle of options, a position in the market, as they say, or at the very least, a company 401(k) tied to the stock market, knows the feeling. The rising stock tide lifts most stock ships, including yours.
Suddenly, you think you might be rich.
Here is how it would go:
Gosh, if I quit my job tomorrow and cash it all in:
– In only one year, gains in stock prices would make up any tax penalties.
– At $50 a share, visions of paying all of your children’s tuition bills.
– At $60 a share, visions of paying off the house and living mortgage free.
– At $70 a share, visions of a second home in the country.
– At $80 a share, visions of enhanced mobility in the form of a new car, maybe something German, a boat, perhaps a plane.
The stock splits. Two shares for one:
– A new kitchen and reconstructed bathrooms.
And so on.
The truth is the market probably isn’t a bad place to be over the long term if you are not freaky about taking risks, but its returns should probably be thought of in single-digit terms. All of that big, fat growth over the last few years simply can’t last forever.
Still, people play paper-dream games in their heads all of the time.
Here is one simple quote from the last week’s scrambling to explain what has happened to the stock market that can help crumple up all those paper dreams.
It comes from one of those faceless analysts contacted by The Associated Press, which was trying to figure out why the market was slumping. You know these people’s names if you read financial news. The minute something wonderful happens, they say the market has already adjusted for it.
“It doesn’t seem panicky. . . . Just this sort of ongoing depression. . . . No one is near the window ledges.”
He made the mistake of using the “D” word and evoking one of the dark images from the troubled past of market speculation. The “D” word has special meaning for anyone with any sense of market history at all, and everyone knows about diving competitions from ledges in 1929.
He was absolutely right, there is this ongoing market “depression.”
But that is like standing in line at O’Hare waiting to get on a plane and talking too loud about how “BOMBED” you were last night and how your head felt like a “BOMB” had gone off and how it felt as though you were carrying a “BOMB” hidden in your belly.
At O’Hare, that kind of talk invites a visit from security.
In your head, the “D” word invites a visit from anxiety.
“No one is near the window ledges.”
People don’t seem to be able to measure economic performance any more except in terms of how it compares with the great Crash of 1929, when windowsills were consoling for people who went a little too far with their paper dreaming.
That’s a shame because it gives too many announcers and speculators and journalists the chance to say, “Well, it’s not as bad as 1929” when what they really mean to say is, “Everyone is not as wealthy on paper as they were just a day or so ago,” which isn’t very dramatic for news purposes.
Stock symbols are what people have these days to replace the wonderful, concrete, fungible stuff that money actually is. Think of them as bricks in the columns that hold up an unreal world. Up is good. Down is bad.
“I have wealth today because the Dow is at 9,337.97 and I am well-positioned!”
Now, we get to live with the other side of the formula in the world of paper dreaming. The market goes down and paper dreams go down with it. We get to reap real anxiety from theoretical wealth.
There is a way to put all of this in a more comfortable light: “If you can’t spend it, don’t count it.”
In short, show me the money.
One might still look with favor on a rising market and hatch all kinds of plans in the brain, but truth is it is best to assume that by the time you can get to it, it’s not going to be there. Maybe there should be a regulator on financial fantasy that stops the whole process down at the “college tuition paid” level.
That way, your financial fantasies can take their rightful place alongside your great sex fantasies (NO. You will never, ever get to sleep with a movie star, even a “B” movie star, and you know it as well as I do.) and all of those places in National Geographic you can dream about but will never get to visit.
