We Are the Ballast for a Ship in Dry Dock

Google Finance: S&P 500 Average 10-Year ChartOn August 8, 2001, the S&P 500 Index stood at 1203.02.

This morning, exactly one decade later, it will open at 1,199.38, in precisely the same place.

Over that period, the index was as high as 1,500 and dipped below 700. So sophisticated investment firms—armed with even more sophisticated algorithms—made money. (Tons of it.)

But any buy-and-hold investor—like millions of U.S. IRA and 401(k) holders—have ridden those nausea-inducing waves up and down, going nowhere, like helpless bobbers.

I’m not turning on CNBC this morning. Because I’m sure I’ll hear the same old story as Wall Street braces for the fallout from Standard & Poor’s U.S. credit rating down grade:

“Stay the course. Don’t panic. Think long-term.”

At the same time, those same talking heads will be trading like mad, aided by computer programs that will move into and out of stocks, often in nanoseconds.

It’s all beginning to feel like a big lie to many investors, especially young investors. And that’s going to make it difficult for communicators to attract new money into the markets.

Mom-and-pop investors are the ballast for a ship in dry dock. And if the holding tank dips much lower, we’ll all face a tipping point.