Lessons from the 1980s: Exploring Inflation, Stock Market, Interest Rates, Home Prices, and Nominal vs Real Factors

by | May 15, 2023 | Invest During Inflation | 6 comments




📖 BUY One Rental at a Time
📣 Audible Version Here
OR
🏆 Buy 15 Conversations with Real Estate Millionaires

Dion from Dion Talk is Narrator!!!
NOW ON AUDIBLE

📸 INSTAGRAM: Please follow. Daily original content!

📬 (MUST JOIN!) PRIVATE Facebook Group: One Rental at a Time Works
This is a VERY private group that is only available to my students of “How to Get Started One Rental at a Time” In the group, you will be around hundreds of other students all doing the work. Please introduce yourself when you join!
JOIN HERE:

TEACHABLE COURSES: Join the THOUSANDS of students changing their financial future with DAILY execution!
💎 How to Get Started One Rental at a Time:
This course is changing lives! Investors focus and do the daily work required to learn their market and only do GOOD Deals.
JOIN HERE:

💸 Get Money Right: This course is about making you the CFO of your money. It shows you how choices can keep you poor or set you free. It highlights your Financial Health Score and provides a monthly budget to help you track spending.
JOIN HERE:

📲 MENTORING OPTION:
I built my courses to run without me but some folks find themselves in interesting situations and they want to ask questions directly. So after much thought I have created this option that includes one “30 Minute Mentoring” session that can be used at students request.
JOIN HERE:

✍️ FREE COURSE:
I put together a Free Course so people can get to know me a little more and have fun getting started with no cost.
JOIN HERE:

See also  How Does A Rental Property Fit In My Retirement Plan? Part II

📣AUDIOBOOK:
PLEASE LEAVE 5 Stars!
*** Tag me on IG with a book selfie!

🧢 MERCH:
I have created some fun merchandise designed by my daughter.
Check out Merch Page here: …(read more)


LEARN ABOUT: Investing During Inflation

REVEALED: Best Investment During Inflation

HOW TO INVEST IN GOLD: Gold IRA Investing

HOW TO INVEST IN SILVER: Silver IRA Investing


The decade of the 1980s was a transitional period in the global economy, marked by significant changes in the behavior of key economic indicators such as inflation, stock market performance, interest rates, home prices, and nominal versus real values. While the specific circumstances of the 1980s may not be exactly replicable in the present day, there are still valuable lessons to be learned from this era about how these factors interact and impact overall economic growth.

Inflation

During the 1970s, inflation rates in the United States had reached alarming levels, with some years seeing double-digit increases in prices. In response, the Federal Reserve under the leadership of Paul Volcker implemented a series of tight monetary policies designed to curb inflation and stabilize the economy. This led to a recession in the early 1980s, but ultimately succeeded in bringing inflation rates down from their peak. The lesson here is that while short-term pain may be necessary to address systemic economic issues, it is possible to tangle them with a long-term vision and plan.

Stock Market

The 1980s was a time of explosive growth in the stock market, with a bull market that lasted for most of the decade. This was due in part to the increased availability of individual retirement accounts (IRAs) and other investment vehicles that enabled greater participation in the market from everyday investors. Additionally, the deregulation of financial markets allowed for more creative investment strategies and product offerings. However, the decade also saw several major market crashes and corrections, including the Black Monday crash of 1987. The lesson for us is that stock market growth is not always consistent or predictable and can be impacted by external factors beyond our control.

See also  Stocks Plummeting, Inflation Soaring, and Banks Failing.

Interest Rates

The interest rates in the 1980s were also volatile, marked by sharp increases and decreases in response to the Federal Reserve’s monetary policy decisions. High inflation rates in the early years of the decade led to higher interest rates, which in turn helped to slow inflation. However, as inflation rates decreased, interest rates also lowered, resulting in an increase in borrowing and lending activity. The lesson we can gather from this is that interest rates are a critical driver of macroeconomic activity, and that they can have significant ripple effects across multiple sectors of the economy.

Home Prices

The 1980s were a time of relative stability in home prices, with modest growth rates that were largely in line with inflation. However, some areas of the country (especially those with a high population growth rate) did experience significant increases in home prices, leading to concerns about affordability and accessibility. An important lesson here is that housing prices are often influenced by factors outside of a local market, including government policies, demographic trends, and macroeconomic conditions.

Nominal vs Real

Finally, the 1980s serves as a useful case study about the difference between nominal and real values. Nominal values are those that are unadjusted for inflation, while real values take inflation into account. Understanding the distinction between these two types of values is critical for making informed decisions about investments or other financial choices. It’s a notable lesson that one has to take inflation into account while projecting long term value.

In conclusion, while the 1980s had its own unique challenges and opportunities, it still presents valuable insight into the inner workings of the economy. By taking into account the lessons learned in the past, individuals and societies can better prepare for future economic changes and make more informed decisions.

See also  Inflation keeps people POOR
Gold IRA Advantages for Baby Boomers Nearing Retirement
You May Also Like

6 Comments

  1. Paul Jensen

    Consider a new row for Adjusted GDP or REAL GDP (GDP – CPI)?
    Are there data out there for New Home Formations? It would be fascinating to see how: 1) Vacancy Rates, 2) New Home Formations, and 3) New Homes Sold all relate to each other.

  2. Trucking Landlord

    30 day T Bills are at 5.4%. That's where I'm moving my emergency fund.

  3. GrownUpGaming

    Zuber, I soooo wish you guys would add INVENTORY as another row on this sheet. That is what makes it different than 1982.

  4. GrownUpGaming

    So 2023…is most like 1982. inflation coming down, unemployment getting higher, maybe one more year of real home price depreciation, maybe one more year of bank failures.

  5. Don and Bev Perkins

    If we’ve had peak inflation already, it’s the 70s/80s much quicker and magnitudes less than the 70s we effectively are already in the 80s.. one year for the 70s decade now behind us, 1 year for the 80s decade in process for two months already! They should raise savings rate (to stop the outflow) and lend more 6-7% residential mortgage money and they can stay in business 🙂

U.S. National Debt

The current U.S. national debt:
$34,552,930,923,742

Source

ben stein recessions & depressions

Retirement Age Calculator

  Original Size