New data is out, reflecting that margin debt has increased, reaching the highest levels in all of history. Current data now reflects that margin debt has recently surpassed levels hit in 2000, at the height of the Tech bubble.Doug Short each month produces a great series of charts on this subject.

Should we a give hoot about debt levels? Below is some data I find interesting!


Why do people invest? I suspect one of the reasons is to get growth on their assets, over and above inflation. Margin debt hit record levels in 2000 and the above chart from Global Financial Data compares “Net Returns After Inflation” of a variety of assets since 2000. 

What were the best assets to beat inflation over the last 13-years?

Despite the run up in stocks since 2009, and the S&P 500 hitting all-time highs; when competing against inflation, the Dow and S&P 500 haven’t done a very good job even when inflation levels have been fairly low.

Could margin debt levels hitting all-time highs be important for the average person? Yes, when margin debt has reached high levels in the past, stocks really struggled to beat inflation. Will it be different this time?

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past