Stocks: Crap
The experts agree: stocks are a big waste of time. For more than one reason! You would have done as well, ten years ago, just burying your money in a jar in the yard.
Look at the stock chart above illustrating the past ten years. Look at it! Paul Krugman today points out the obvious: The whole decade was a waste.
Last and least for most Americans - but a big deal for retirement accounts, not to mention the talking heads on financial TV - it was a decade of zero gains for stocks, even without taking inflation into account. Remember the excitement when the Dow first topped 10,000, and best-selling books like "Dow 36,000" predicted that the good times would just keep rolling? Well, that was back in 1999. Last week the market closed at 10,520.
And it gets worse! As he hinted, the whole decade was a wash without taking inflation into account. And what if we do take it into account? Fortunately for, ah, suicidal investors, the WSJ illustrated just how bleak the real picture is today:
In 1999 dollars, the Dow is only at about 8200 [today] and would have to rise another 28% or so to return to 1999 levels. Using today's dollars and starting at 10520.10, the Dow would have to surpass 13460 to get back to its 1999 level in real, inflation-adjusted terms.
So you, the investor, can take heart in the fact that your plain vanilla Dow Jones index portfolio didn't just tread water the entire past decade; instead, it lost more than a quarter of its real value. You should have listened when your gut told you to invest it all in GI Joe action figures.