The Worst Decade for Investments Ever

You knew it was bad, but did you know it was that bad?    

The Yale International Center for Finance recently put out their results of a tally of all stocks listed on the New York Stock Exchange and they found that the average annual return for the 21st century so far was -0.51%.  But what does that really mean? Yale puts the following spin on the results to give us some perspective:       

  • That’s worse than the 1930s, when the Great Depression caused returns to average -0.22%.
  • It’s worse than the 1970s when, despite the energy crisis, rampant inflation and hostages in Iran, the market still managed to grow 6.61% annually.
  • The NYSE even did better during the Civil War; in the 1860s stocks gained a healthy 12.51% on average.
  • Stocks also fared better from 1834 to 1839, even though President Andrew Jackson was censured by the Senate amid his refusal to preserve the banking system of the day. Despite the turmoil, stocks rose 2.84% annually.

But that’s enough gloom. Clearly those statistics junkies that put this study together are a glass half-empty bunch. Thankfully, the rest of the glass is equally full of optimism. 

Data also show that of the past 18 decades of the Stock Market, 16 were profitable with returns averaging 10% per year. That’s the thing we’ve always got to remember about the Market: it’s a law of averages. If we try to predict or outrun it, we get heart attacks and losses. The data also indicate that when the Market is a big loser, like it was for opening of the 21st Century, gain years typically win by bigger margins than losing years. In fact, in 32% of the positive years, gains exceeded 20%. 

 So, yes, this decade has been awful. Really awful. Just terrible. The worst in history. But, buck up little campers, cause there is no where else to go but up.  Oh, and just when I might be impressing you with my amazing statistical data mind, credit for the info must go first to Yale and secondly to Nelisha Firestone, Financial Consultant at Coors Credit Union, because they are both much smarter than me.   

      

      

   

  

    

   

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