Back to 1997

Martin Wolf has an interesting column up today:

http://www.ft.com/cms/s/0/0fa9d526-8eec-11dd-946c-0000779fd18c,s01=1.html

In it, if you look close, you'll see an inflation adjusted analysis of the S&P 500. Notice where it is today? About the same place it was in 1997/1998.

So, after 10 years, with annual GDP growth positive for almost every quarter of those 10 years, the S&P 500 is exactly the same where it was 10 years ago. The total capitalization is likely different, since companies ebb and flow out of the index, and the overall amount of outstanding shares changes, so maybe this isn't such a big deal overall.

But if you are an index investor, like lots of people are in their 401Ks and IRAs, this means that you have made absolutely nothing in 10 years, if you were only holding S&P 500 ETFs. But don't feel too bad, it's the same for anybody living in the UK and investing in the FTSE 100.