Atlanta Journal Constitution
December 27, 2009
|Many retirees lost a lot of their private nest egg in the market collapse that began last fall.|
The U.S. stock market is wrapping up what is likely to be its worst decade ever.
In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.
Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade….
This past decade looks even worse when the impact of inflation is considered.
Since the end of 1999, the Standard & Poor’s 500-stock index has lost an average of 3.3% a year on an inflation-adjusted basis, compared with a 1.8% average annual gain during the 1930s when deflation afflicted the economy, according to data compiled by Charles Jones, finance professor at North Carolina State University.
After the 2004 election, you might recall, President Bush decided to spend his “mandate” pushing a scheme to privatize Social Security and encourage investment of retirement funds in the stock market. Many retirees — and many of those approaching retirement — lost a lot of their private nest egg in the market collapse that began last fall, but the damage would have been greatly compounded had they invested a good portion of their Social Security funds in the market as well.