You’ve been told to invest in the stock market because given enough time, it always goes up, right? However, the spending power of those dollars are rapidly declining. While the nominal gains in the stock market might look impressive on paper, when you factor in inflation, those gains are actually quite hollow. The truth is, if you’re not beating inflation, you’re not actually making any money. In the chart we can see the M2 money supply graphed against the growth of the S&P 500 over the last 60 years. The M2 money supply can be thought of as the total amount of money in the United States economy. When money is printed, this number increases. Looking at the chart, we can see the close relationship between S&P growth and monetary inflation.