A Lost Decade?

If you had purchased shares in the S&P 500 index (through the SPY index ETF) in July 1997 (at about $91-92 per share), your investment would be worth the same amount today, but in today’s dollars. So technically you would have lost money if you consider inflation. So it has an annualized return of about 0%, neglecting inflation. All this ignores dividends which were roughly 1.5-3% during that period (very rough guess). So let’s just for sake of argument that the dividends cancel out inflation. So again, the annualized return would have been roughly 0%. If you made any more purchases of the S&P 500 index after 1997, well, you annualized return would have only gotten worse because except for a brief period in early 2003, SPY hasn’t been below $91-92 since 1997.

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4 Responses to “A Lost Decade?”


  • It is a lost decade if your investments did as well as the S&P 500, but if you have a wealth manager that has done better than the S&P 500, you are okay.

  • I don’t understand the satetment that SPY hasn’t been down below $ 91 since 1997. As of today, the 52 week range is 74.34 – 152.89.
    Am I missing something?

  • Graeme, I meant that there was no period after 1997 when SPY was below $91-92 range, except for a brief period in 2003. So, in other words, any one who put money into SPY after 1997 would have lost money by 2008.

  • Shannon, so what? There are always going to be people who do better than the average and those that do worse than the average. If you can’t be predictably above average, then who cares?

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