Timothy D. Naegele (interview w/ me here) sent in this WSJ article, having commented:
The factor that has driven the American economy in recent years is consumer spending; and the factor that has driven the stock market is the influx of investors who should not be in the stock market at all. They know little or nothing about it; and they have relied on "investment advisers" who in another life—or perhaps this one—were used-car salesmen…
For a model of the proper way to make money in the financial system, see Phil’s TARPless Tuesday – WFC Joins the Exodus.
Investors Hope the ’10s Beat the ’00s
Since End of 1999, U.S. Stocks’ Performance Has Been the All-Time Clunker; Even 1930s Beat It
By TOM LAURICELLA
The U.S. stock market is wrapping up what is likely to be its worst decade ever.
In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.
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.
The period has provided a lesson for ordinary Americans who used stocks as their primary way of saving for retirement.
Many investors were lured to the stock market by the bull market that began in the early 1980s and gained force through the 1990s. But coming out of the 1990s—when a 17.6% average annual gain made it the second-best decade in history behind the 1950s—stocks simply had gotten too expensive. Companies also pared dividends, cutting into investor returns. And in a time of financial panic like 2008, stocks were a terrible place to invest.
With two weeks to go in 2009, the declines since the end of 1999 make the last 10 years the worst calendar decade for stocks going back to the 1820s, when reliable stock market records begin, according to data compiled by Yale University finance professor William Goetzmann.
Read the full article here.>>
