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Old 06-04-2014, 12:24 PM   #21
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It is true that many forum posters here have been doing well, just as I did. I realize my post above was not helpful to explain the apparent contradiction with the above info. So, let me try again.

Yes, the stock market has been lousy in the 2000-2010 decade. However, by being diversified into other asset classes, the most obvious being bonds, and periodically rebalancing between them, one could still get ahead. For people who do not want to do this themselves, there are balanced mutual funds that give you hand-off performance that not shabby. Three of the funds that I know are shown below.

From March 2000 (top of market) till now, for a $10K investment, Wellesley has returned $30.9K, Dodge & Cox Balanced $33.5K, Oakmark Equity & Income $39.0K. Note that the high return of Oakmark is accompanied by higher ups and downs, and requires a stronger stomach. The above info comes from Morningstar, and assumes all dividend and capital gain distributions were reinvested.

The cumulative inflation from 3/2000 till 4/2014 is 38.5%. So, the inflation-adjusted returns of the above MFs are 2.23X, 2.42X, and 2.82X. You do not get rich with these returns, but they are far better in investing solely in the S&P index. And the NASDAQ makes a poor benchmark because it is loaded with "new-economy" and tech stocks, and still is.

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Old 06-04-2014, 12:55 PM   #22
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Originally Posted by Bikerdude View Post
Me thinks you may be onto something.

The S&P 500, Dow and Nasdaq Since Their 2000 Highs
Interesting chart. Thanks for posting. The investment companies have so much to gain from investments like stock mutual funds compared to investment in TIPS and credit union CD ladders, I often wonder if the literature they pump out is really telling the whole story or carefully selected dribs and drabs.

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Old 06-04-2014, 01:46 PM   #23
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The bear is still wandering around? Another chart from the same web site:
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File Type: gif SP-Composite-secular-trends-with-regression-channel.gif (64.1 KB, 37 views)
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Old 06-04-2014, 01:51 PM   #24
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Uh Oh! The above chart shows that we have been above the regression line for quite a while. In fact, even the crash of 2008-2009 did not dip much below that line. Shiller is onto something here.

PS. On the other hand, the market can persist above or below that line for 2 to 3 decades. That's a long time to hold your breath!

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