Investors Better Off Investing in Anything but Stocks

“A nightmare decade for stocks,” says a headline in The Wall Street Journal.

“Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade.”

The 1990s was the best calendar decade in history for stocks, with an annual gain on average of 17.5%. This decade, by contrast, was the worst calendar decade for stocks going all the way back to the 1820s…

Which gives us a sense of triumph…you know, that’s the thing that comes before a fall. Ten years ago, we warned readers that the US stock market was going into a bear market that would be like the Japanese market following the stock crash in Tokyo in ’89. It would be “long, soft and slow” we said.

Then, the market rebounded. Investors thought the promises of the ’90s – “stocks for the long run” or even “Dow 36,000” – were still good. As for Markets and Money, it was obvious that we didn’t know what we were talking about, because the Dow just kept going up…first above the high set in 1999…and then all the way to over 14,000. Even we had to admit… If this was a bear market, it was a very strange one!

Ten years later, the decade of the ’00s has proven to be the worst ever. Yes, dear reader, the ’00s were the worst for investors ever, even worse than the 1930s.

Now, we are wondering: what’s next for the stock market? More of the same. The bear market that began in January ’00 still has not fully expressed itself. Stocks have not been beaten down to bargain levels – where they sell at 5 to 8 times earnings. Investors have not given up. There is no widespread sense of disgust and disillusionment with the stock market.

And it still takes about 10 ounces of gold to buy the Dow stocks. At the bottom, you’ll be able to buy the Dow for just 1 or 2 ounces. And then…you’ll think twice. Because everyone around you will be telling you that stocks are ‘finished.’

And who knows? Maybe they’ll be right…

Bill Bonner
for Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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5 Comments on "Investors Better Off Investing in Anything but Stocks"

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Every investor should read this article.

Coffee Addict

My current strategy is to invest in “micro” cap resource stocks that are more impacted my “micro level” events than by market shifts.

Merry Christmas to all!

Greg Atkinson

Bill needs to check how Warren Buffet did over the last 10 years, clearly there was money to be made in stocks. But as always how any investment performs depends over which period you select to use as your baseline and how you calculate performance. The data can be twisted to suit just about any point of view.


Yet another article criticising share performance without factoring the value of dividends. The ASX 200 accumulation index has increased by 125% since end of 1999, the the ASX 200 has only gone up around 53% in the same period. That means investors have received over 70% in dividends.

I am pretty sure the US indices despite dropping 10% would have paid out a lot more than that in dividends and would have exceeded the performance of many low interest investments.


Warren Buffet bought up a number of unlisted companies and ran them profitably.
Berkshire Hathaway is also a large insurer in its own right and makes money from that business too.
He wasn’t only operating in the stock market.

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