Monday, December 21, 2009

Notwithstanding the likes of Cramer and Kudlow ...

"The U.S. stock market is wrapping up what is likely to be its worst decade ever." So says this article in the WSJ: Investors Hope the '10s Beat the '00s
In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s. This past decade looks even worse when the impact of inflation is considered.

To some degree these statistics are a quirk of the calendar, based on when the 10-year period starts and finishes. The 10-year periods ending in 1937 and 1938 were worse than the most recent calendar decade because they capture the full effect of stocks hitting their peak in 1929 and the October crash of that year.

Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade.

Many investors were lured to the stock market ... but coming out of the 1990s, the best calendar decade in history with a 17.6% average annual gain, stocks simply had gotten too expensive.


Of course, the usual talking heads and cheerleaders in the financial news and entertainment industry didn't say so; indeed, they baited the lure. Noughty, noughty.


SAME IDEA, OTHER PLACES:

Partisan Hackery

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