2008 All Over Again?

As I have argued before, claims of a “lost decade” are pretty significantly overdone. Such claims typically ignore dividends and, even more importantly, treat the index at issue (typically the S&P 500) as a proxy for one’s entire investment portfolio.  That’s nonsense, of course.  A well diversified portfolio hasn’t been a rousing success over the past decade or so, but it has performed much better than the lost decaders would have you believe (largely on the strength of the bond markets).

That said, here is an interesting and unusual fact.  The S&P closed at 1,072.28 on October 3, 2001 — ten years ago.  The S&P closed yesterday at 1099.23 (see here).  That’s lousy performance by any measure, even though (to reiterate) this measure doesn’t include dividends (which improve performance by a decent amount — see here).

But that’s not what’s interesting and unusual.  On October 3, 2008, the S&P 500 closed at 1099.23 (see here), the exact figure as yesterday’s close.  October 3, 2008 was the day then President Bush signed the financial bail-out bill into law.  Perhaps it is 2008 all over again.


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