When Will Languishing U.S. Stocks Resume Growth Trend?
By MICHAEL CONNOLLY
Conventional stock-market wisdom holds that if investors buy a broad range of stocks and hold them, they will do better than they would in other investments. But that rule hasn't held up for U.S. stocks bought in the late 1990s or in 2000.
As E.S. Browning reports, over the past nine years, the Standard & Poor's 500-stock Index is the worst-performing of nine investment vehicles tracked by Morningstar, including commodities, real-estate investment trusts and gold. Big U.S. stocks were outrun even by U.S. Treasury bonds, which historically perform much less well than stocks. The stock market is trading right where it was nine years ago, and when dividends and inflation are taken into account, stock-market investors have incurred losses since 1999.
The other significant times when the U.S. stock market's steady upward march was disrupted for long stretches were during the Great Depression of the 1930s and the inflation-plagued 1970s. So far, however, the current decade hasn't featured the high inflation of the 1970s or the high unemployment of the 1930s. That makes some analysts and economists hopeful that the stock troubles won't be as bad or last as long as they did back then, despite the housing crisis and the breakdown in parts of the mortgage and lending businesses. And many of them hope the Federal Reserve will do a better job of righting the ship this time.
Read E.S. Browning's report:
Read about Tuesday's surge in Asian and European markets:
