Twelve Years of Stock Market Misery
If you invested in an Index Fund based on the S&P 500 Index on May 1 of 1998, congratulations. Your portfolio has neither lost nor gained a penny — of course if you factor in inflation, you’ve actually lost a lot of money. Twelve years, nothing but losses. Whether you were just getting started investing or you were entering your golden retirement years, that is one helluva plateau for the markets! Let’s look at the numbers across the major indices during the last twelve years:
S&P 500 – 1121 to 1117
Dow Jones- 9147 to 10450
Nasdaq – 1873 to 2309
Do the calculations and you will get anywhere from a very slight loss to a 1.9% annual gain, assuming you invested on May 1, 1998 in a lump sum and neither added nor subtracted. It’s even worse if you made regular contributions! For 9-10 of those years you bought in at levels higher than the current level, so you are actually looking at quite a loss. Factor in an average inflation rate of 2.7% and it gets even worse.
I really don’t see how this is any better than gambling, and I definitely don’t see why I should do anything other than fixed interest investing.
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