According to this morning’s Wall Street Journal, the 2000s are on track for a dismal record: the worst performance of U.S. stocks in any decade on record.
According to data from the Yale International Center for Finance, stocks have fallen about 0.5% per year, on average, during the current decade. Unless stocks stage a healthy rally in the next two weeks, the 00s will thus come in behind each of the past 17 decades, including the -0.2% average annual return of the 1930s.
As the article notes, this comparison is partly driven by a “quirk of the calendar, based on when the 10-year period starts and finishes.” For example, stocks fell more in the ten-year period ending in 1938 than they did in the 00s. For a nice year-by-year display, see the WSJ’s graphics (which include the chart below).
Let’s hope the 2010s do better.
We need to thank Greenspan and Bernanke for this. They both allowed bubbles in the economy with a bad money policy.
I wonder if this will be a game changer for a generation of investors. Those that read the theory that more or less says that in any 10 year period stocks always go up and the reality of the last 10 years. And will stock returns be flat because new investors don’t materialize?