U.S. Equities' Heartbreaking Performance is Nothing New
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Authors
Weigand, Robert A.
Issue Date
2009-11-1
Type
Working paper
Language
en_US
Keywords
Stocks , Bear markets , Financial crisis , United States , Equity returns
Alternative Title
Abstract
US equities have delivered poor long-term returns with surprising regularity: in the 1910s, the 1930s, the 1970s, and the 2000s. Following bear markets of the 1930s and the 1970s, stock valuations languished for a considerable period before providing investors with long-term returns that outperformed inflation. Investors should consider that much of the increase in stock values from March-August 2009 may be driven more by a 1990s-style belief in the infallibility of equities as an investment class than by tangible improvements in global economic conditions. The risk remains that much of the gains in stocks in 2009 could be another "false start" that characterized recoveries from former "super-bear" markets.
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Citation
Publisher
Washburn University. School of Business