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The 2nd Worst Decade- 2000 to 2010

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Period

S&P 500

1880-1890 5.28%
1890-1900 13.38%
1900-1910 65.25%
1910-1920 44.75%
1920-1930 145.87%
1930-1940 -43.34%
1940-1950 37.24%
1950-1960 243.78%
1960-1970 55.63%
1970-1980 22.80%
1980-1990 206.56%
1990-2000 319.33%
2000-2010 -21.39%
2010-2020              ?

If you look at the table above, it shows a continued steady increase in the value of the stock market over 130 years. At the same time, it shows that the past 10 years has been the second worst decade for stocks. The worst being the aftermath of the Great Depression years.

But maybe we are speaking ahead of ourselves as there are still a few more market days before the end of 2009.

The table is reproduced from an article in the Motley Fool, A Terrible Decade for Stocks- and Reason for Optimism. I have articles from there sent to my email and I read them if they sound interesting to get ideas and to increase my knowledge of financial and investment matters.

So is one past indicator, with a positive return after a negative, a sign that after the second worst decade, an immediate rebound is on the cards?

Orchard Road Christmas lightupThe article in Motley Fool seems to think that it is a given that it will and compares different time points and even a different index, pulling the Dow Jones Industrial Index to the picture too.

I think that it is not that certain and it will depend very much on how the governments of United States and the developed economies in Europe and Japan find ways to resuscitate their economies.

The economy that was the most affected by the Great Depression of the 1930s, Germany, had unemployment rate above 10% and voted in the Nazis. In this time of troubles, the terrorists, the extremists will have no difficulty getting converts or hearing from the masses, some of whom may be swayed by their accusations and ‘solutions’.

I am still invested in the markets and looking to make more investments where the opportunity presents itself. Currently reading two books by Peter Lynch and a book about the Google. Sometimes, I tend to want to start on too many different things and end up doing nothing much. Think it is called ‘paralysis by analysis’. 

Have a good Christmas and Boxing Day and an enjoyable end to what has been an eventful year of 2009.

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2 comments:
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Musicwhiz said...
December 26, 2009 at 1:47 AM  

If what Warren Buffett says is accurate, 2010 to 2019 may turn out to be one of the most powerful decades for equities. We shall wait and see. :)

Cheers,
Musicwhiz

gravatar
Lemizeraq said...
December 26, 2009 at 11:30 AM  

Hi Musicwhiz,

Let us all hope that it is powerful in the positive direction :)

Have a belated Merry Christmas and Happy New Year.

Thanks for visiting again.

Lemizeraq

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