For those of you who watch or have heard of the hit series “Mad Men,” you’ll know that the show provides an interesting story line, some fascinating characters, and great commentary on the social mores and gender differences of the late ’50s and early ’60s.
I’ve been watching lately with an eye toward the financial side of life in that era. There are no credit cards to speak of—Don Draper, the main character, peels off cold cash when he asks his secretary to buy Christmas presents for his children. This is pre-401(k)s and IRAs, and Don and his band of not-so-merry marketers left behind whatever pensions they had coming to them when they broke with their old advertising agency to go out on their own. There is little if any dialogue concerning personal investing at all.
The first 60,000 “BankAmericard” credit cards appeared in Fresno, California, in 1958, and as Joseph Nocera writes in A Piece of the Action, that event marked the start of the money revolution. It was a sign of the middle class moving from passbook savings to more sophisticated financial relationships, and of consumers changing financial relationships—in other words, switching banks because of services offered, including credit cards.
Where were mutual funds at this time? Just starting to become interesting. At the end of World War II, total assets held in mutual funds amounted to less than $900 million. At the beginning of 1965, the Dow Jones Industrial Average topped 900 for the first time. For all of 1965, the Federal Reserve reported that cash flow into funds totaled $2.2 billion. Things started heating up from there.
Turning back to credit cards, from those small beginnings in the late ’50s, revolving debt has climbed to a breathtaking $852.6 billion, all but a very small portion of which is credit card debt. (I’m expecting Don to pull out his first credit card by the close of the current season.)
The late ’60s were a volatile time for the financial markets, and I keep wondering if messaging around balanced investing, asset allocation, and risk tolerance might have stemmed or helped prevent some of the excesses of that era. I’d like to think some people would have heeded the message and mitigated their losses. Looking to our own time, those messages certainly should have helped investors during this last—and probably continuing—roller coaster of market volatility.
Did they help you?
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