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Opinion: The shocking truth about stock returns in this century

Published: Sept 22, 2017 5:54 a.m. ET

The S&P 500 is barely positive in inflation-adjusted terms

By Mark Hulbert

CHAPEL HILL, N.C. (MarketWatch) — Ready for today’s investment pop quiz?

What is the S&P 500’s inflation-adjusted return this century?

If you’re like most investors, your guess will be way too high. Believe it or not, the S&P 500 SPX, -0.30% after inflation has produced just a 0.9% annualized price-only return since its March 24, 2000, top.

ow can this be, you might ask, given that we’re experiencing the second strongest and second-longest bull market in U.S. history? The culprits, needless to say, are the two severe bear markets that occurred along the way. The S&P 500 dropped by 49.1% during the 2000-2002 bear market, for example, and an additional 56.8% in the 2007-09 downturn. It takes a lot more than a powerful bull market to overcome them.

One way to appreciate the impact of those two bear markets is to realize that a mere correction would wipe out the S&P’s slight inflation-adjusted gain since March 2000. Just a 12.9% decline would do the trick, in fact.

MORE @ http://www.marketwatch.com/story/the-shocking-truth-about-stock-returns-in-this-century-2017-09-22?siteid=rss&rss=1