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Wednesday, December 30, 2009

Investing in Stocks Has Fared Not at All. And You Thought Japan Had the Lost Decade? Try TWO...

*You really are better off keeping your hard earned cash under the confines of your mattress. So says the elderly, the ones who have lived through the Depression and various cyclical boom and bust normalities of the vagaries of the US stock market and its inglorious bastards of financial doomdom. Be prepared to hang on even tighter, if you have anything left of course, going forward. Why you ask? Because Wall Street will make little money in the coming decade unless they can convince you that investing in the next decade will be ohhh so much better than the previous if only because its not the previous! Dream on suckers. Looking out over the horizon as far as the eye can see and you come up emptier than a one night stand. With interest rates near zero, if only for the wealthy of course, and consumers holding their their hands with no job, no credit and a future of barterism, one wonders just how can Wall Street manage to drum up the easter bunny and spread the golden goose of cash once again. Ask yourself: Are you better off now than just 5 years ago? Cuz thats the new cyclical beast. The new long term hold is 3 to 5 while Wall Street wants you to look at the performance over 15 years now instead of 10. With that in mind, take into consideration Japans Nikkei over a 20 year span. Its frightening. Happy Trading.

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

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.
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. He estimates it would take a 3.6% rise between now and year end for the decade to come in better than the 0.2% decline suffered by stocks during the Depression years of the 1930s.
The past decade also well underperformed other decades with major financial panics, such as in 1907 and 1893.

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