5 Year Performance, Selected Markets

SPX, Dow and Nasdaq have all dramatically underperfomed other asset classes over the past 5 years. Despite all the cheerleading about the 5 year highs, this has not been a very happy period for domestic US equity investors.

5 Year Performance, Selected Markets
(US Dollars 3/20/01-3/17/06)


Source:  Mike Panzner, Rabobank

Annually, the US indices are even less impressive: the S&P500 has generated annualized returns of only 2.72%, while the Dow was slightly better at 3.02% per year. Over 5 years, the Nasdaq performance was 4.43% annually. One of the most respectable indices in the US market was the Russell 2000 Small Cap index, which returned a healthy 10.93% a year.


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What's been said:

Discussions found on the web:
  1. B commented on Mar 21

    Wow, I think copper has more legs. That’s what Cramers says.

  2. Kevin Hawkins commented on Mar 21

    B – Don’t always listen to Cramer. Take a looksy at NMT Medical, that was a brilliant pick. Copper is overheated, get out now and switch to sugar, salt, or maybe even PORK as Cramer said a few days ago.

  3. SINGER commented on Mar 21

    The picture just simply doesn’t lie…

    I was recently trying to play what looked like a long overdue pullback in Copper by buying puts on PCU…The copper pulled back to 215 ish but as we can see its recently pushed past its old high @ 231… The stock found support around 76 so when it wouldn’t go any lower I closed my position..

    The copper chart of the past few years looks crazy….Do you think we will get a more pronounced pullback in the Commodities near term or was that relatively subdued one we just experienced it?????


  4. B commented on Mar 21

    Kevin, I hope you are joking because I am. Could anyone actually look at that chart and say what I said intelligently?

  5. thecynic commented on Mar 21

    so since GWB took office the best performing sectors are emerging markets and commodities (forgot foreign currency)? but there is no inflation…. right.
    it is not a coincidence that working class real wages have decline since Bush took office and the dollar has fallen. these charts are indicative of this

  6. royce commented on Mar 21

    The S&P’s runup pre-2000 was so huge, it’s not surprising that gains have been weak since then. If you’ve been in the market since the early 1990s, you’ve got nothing to complain about. And the past five years just shows the benefits of diversification into the broader market and international stocks.

  7. dir120 commented on Mar 21

    Never listen to Cramer

  8. quints commented on Mar 21

    The chart says buy the S&P 500. It is due to catch up.

  9. mike simonsen commented on Mar 21

    why is it that no one ever talks about the copper or oil bubble? The price leaps of the past few years are clearly unsustainable. Massive over investment in manufacturing in China, mixed with massive global liquidity has driven commodity price leaps at least as much as it has driven the US housing bubble.

    I can envision a scenario where in 2008 we’ve seen China rationalizing its investment, easing way back on demand. Global tightening in the wake of rising inflation and commodity prices at half where they are today.

    ‘Course the question is, how do I trade on this scenario?

  10. Marc commented on Mar 22

    “…the S&P500 has generated annualized returns of only 2.72%, while the Dow was slightly better at 3.02% per year. Over 5 years, the Nasdaq performance was 4.43% annually.”

    Subtract inflation, and the real rate of return is negative for the S&P and only slightly positive for the other two indexes.

    More and more, we do seem to be in the midst of a secular bear market; following the typical pattern of net stagnation over a prolonged period of time.

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