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How Much Wealth Has The Stock Market Destroyed?
From the high point of wealth creation in May of 1998, domestic equity mutual fund holders have seen 43% of their wealth disappear in the last few weeks. Economically speaking, if the stock market does not rebound significantly soon, this wealth destruction looks to be enough to impact economic performance. Bonds are correct to rally on the back of lower stock prices, since these lower stock prices will hurt the economy more than most other “conventional” economic events.