Stock market

“If you owned stocks, bonds, real estate, hard assets, you benefited. Prices on everything from parking lots to publicly traded equities went dramatically higher.” — Farr, Miller & Washington, a Washington, D.C.-based investment firm.

If the years 2000 to 2009 brought investors — both big and small — back to reality and to their knees in regards to earning money through the stock market, then what lessons has this just-concluded decade taught us?

The most obvious answer would be this: The stock market remains a place to invest and earn money — substantial money.

The Standard & Poor’s 500-stock index, which tracks the largest U.S. companies, registered a total return of nearly 256 percent, beginning in 2010.

A Washington Post report published Dec. 31 noted a $10,000 investment made in 2010 would have transformed itself into $36,000 at the end of 2019.

Investors witnessed annual growth during this past decade of 13.5 percent, noted Howard Silverblatt, a senior index analyst at the S&P Dow Jones Indices.

According to the S&P data starting in the 1930s, this just concluded decade was the fourth-best and it might have seemed even better based off the fact the 2000 to 2009 decade (annual growth rate of 0.86 percent) was the worst.

By comparison, the best decade was 1950 to 1959 when the average annual growth rate was 19.2 percent.

Here are the growth rates for the past decade:

2010: 13.1 percent

2011: -0.8 percent

2012: 13.4 percent

2013: 29.6 percent

2014: 11.4 percent

2015: -0.7 percent

2016: 9.6 percent

2017: 19.4 percent

2018: -6.2 percent

2019: 28 percent

“If you owned stocks, bonds, real estate, hard assets, you benefited,” an official with the Washington, D.C.-based investment firm, Farr, Miller & Washington, told the Post. “Prices on everything from parking lots to publicly traded equities went dramatically higher.”

According to research, 52 percent of Americans own stocks, largely through retirement accounts such as a 401(k).

Started in 1926, the S&P has had an average rate of return of just less than 10 percent. Since 1957, when the S&P expanded to 500 stocks, it has grown at about an 8 percent per year rate.

Unfortunately, many people who sold in the financial crisis of 2007-09 or who transferred assets to fixed-income accounts were not able to take part in the boom.

“People who retired and thought they would live on their fixed income have become Walmart greeters because the income wasn’t enough,” said an official with Tangler Wealth Management.

The Daily Journal’s Lee Provost writes about local business rumors, comings and goings and other notes of interest. Anyone with information to share should contact Provost at lprovost@daily-journal.com or 815-937-3364. A version of this story appeared in the Friday digital edition of the Daily Journal.

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