Originally Posted by ziggy29
I've heard this a gazillion times in the last few days and it's very misleading.
With dividends reinvested, it was back to break-even in 1944. Not great, but a heck of a lot better than the 1955 claim.
Keep in mind also that if you were fortunate enough to go all-in at the bottom in 1932, an 89% drop from 1929 peak to 1932 trough means you turned $1,000 in 1932 to about $9,000 in 1944 with dividends reinvested. Doesn't seem like waiting until 1955, or even 1944, was a good idea.
I think it just takes a long time to work off the excesses built up. The market in the 80's and 90's went up from a 1,000 to 11,000.
Also, in previous bear markets (in the 30's and 40's), and in the (70's to early 80's), the investing public pretty much abandoned stocks. No one went to work on Wall St, etc. There hasn't been that kind of a wash out yet.
I dont think the market here will drop by more than 50 or 60%. I hope not 89%.
In the 30's, if you bought in the middle, you were pretty much range bound. Similar with the 70's, a choppy market.
Also, there was so much "engineering" going on in the mid to late 90's (every company had that "smooth" 10-15% growth), you factor in the accounting, options expense, etc....that boom is going to look like a mirage the farther we get from it.