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.
Quote of the Day:
“The question is whether venture capitalists are moving too quickly, funding risky, untested start-up businesses – just as they did during the heady, and ultimately unsustainable, technology-stock boom of 1999 and 2000.” –Rebecca Buckman, WSJ