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Market Seems Bullish, But Bearish Conditions Are Certainly Lurking

Posted on March 11, 2014

The stock market in recent years has performed dismally.

Of course, you’d never know that by reading the headlines, which have been celebrating the fifth anniversary of the bull market that began on March 9, 2009.

Yet if you expand your historical perspective by just 18 more months — to the October 2007 bull market top — a much more sobering picture appears. The market over this only-slightly-longer period has performed far more poorly than the long-term average.

And an even more depressing picture emerges when you focus on an entirely different anniversary — the 14th birthday of the bursting of the Internet bubble, which is also this week. The exact day of that anniversary, for those of you keeping count, was Monday of this week; it was on March 10, 2000, that the Nasdaq Composite COMP hit its all-time high of 5,047.90.

Why are so few focusing on these more dismal anniversaries? Might Wall Street be conspiring to divert our attention from them in order to convince us that the stock market consistently provides handsome long-term returns?

You don’t think Wall Street is that cynical, do you?

The accompanying table presents the summary statistics. As you peruse the data, keep in mind that the stock market’s annualized total return over the last century has been 10%. So the stock market’s return since March 2000 has been less than half the historical average.

Continue Reading on www.marketwatch.com

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2 thoughts on “Market Seems Bullish, But Bearish Conditions Are Certainly Lurking

  1. And the grand illusions continue ? Be cautious grasshopper !

  2. In America today, anything beyond two years old is long forgotten. With that perspective the stock market performance is amazing. It will continue to amaze as long as it is bolstered by quantitative easing. When reality sets in and fiscal insanity disappears into that good night the Bernanke bubble will burst. Tears will be shed. Bears will thrive. And the fools that get caught will say "never again". There is nothing left to save of the Obama years. Perhaps Ms. Yellen should lance the boil so the country can heal and go on from there. See my blog at http://cranky-conservative.blogspot.com