A Decade of No Returns?

You hear this a lot. The Stock Market is flat for the past decade. It has gone nowhere. Investors have seen no returns on their investments. Not only is this a moronic statement, but its also not even technically true. There are three major issues I have with this idea of a “no-return market”.

1) It Assumes you invested in the market at January 2000.

-Investing in January 2000 was basically investing at the top, after a 5-year, +200% run in the S&P 500. Not a smart thing to do.

-Investing everything at once is never a good idea. Scaling in and out is the best. So even if you did start investing at the start of the decade, if you had started only in partials, you would not have gotten hit so hard.

-What if I started investing in September 2001? I would’ve had a much better basis in the market than in January 2000.

2) Assumes you invested in just a market index, and no specific stocks.

-Investing in the broad market is fine, but if you truly want great returns, you should probably invest in more specific stocks. Many stocks (I’m not even talking about the small-cap names, I’m talking about the $AAPL, $GOOG, $IBM, $MCD, $CHD ‘s of the world) have offered great returns.


3) There has been solid return. Were at all-time highs  on an total return basis.

-Even if you were to invest everything and the start of the decade, you’d be sitting positive today, on a total return basis. While dividends shouldn’t be the reason to invest, the bank still accepts the money I earn from them.

Check the following chart via @Conorsen.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Tags: $SPX $AAPL $GOOG $STUDY $IBM $MCD $CHD

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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