The
plummeting financial marketsin 2008 scared a lot of
investors out of stocks. Yet despite the fact that those
steep declines brought big losses to shareholders in a hurry,
it's only now that the full brunt of the longer-term trend
has become clear.
By now, you've probably heard about
the lost decadefor the stock market. Over the past 10
years, the S&P 500 has fallen over 300 points or 2.5%
annually. Even taking dividends into account, index-fund
investors have lost money in S&P funds. And as we head
into 2010, the relative losses will likely hit their worst
point as the decade-ago comparison hits the 2000 market
peak.
Where'd that decade go?
Some investors see that as a decade wasted. Those who
prudently scraped and saved to invest regularly have gotten
pretty much no reward at all. That's especially maddening in
light of all the attention that less responsible parties --
such as overextended mortgage borrowers and overleveraged
Wall Street companies -- have gotten from
government bailoutsand support programs.
In fact, if you invested in the wrong stocks, you may well
have done a lot worse. Leaving aside for the moment
colossal implosionslike
General Motors , Bear Stearns, and Washington
Mutual, even these still-surviving companies haven't done any
favors for their shareholders lately:
Stock
10-Year Avg. Ann. Return
General Electric (NYSE: GE)
(8.1%)
Morgan Stanley (NYSE: MS)
(2.1%)
Gap (NYSE: GPS)
(2.5%)
Southwest Airlines (NYSE: LUV)
(3.1%)
Pfizer (NYSE: PFE)
(4.0%)
Alcoa (NYSE: AA)
(6.3%)
Yahoo! (Nasdaq: YHOO)
(10.1%) Continued... |