S&P 500: Sound and Fury for What? | Elliott Wave International

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S&P 500: Sound and Fury for What?
After 12 years, investors came up empty handed. What's next?

By Bob Stokes
Thu, 21 Jun 2012 14:00:00 ET

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If you've invested real money in the stock market you know it's not for the faint of heart.

Even with stock mutual funds, it can be tough to open up that monthly statement when the market is going against you. Some people have actually told me they don't even open up their statement during such times. They don't want to see the dollar amount their account has gone down.

Of course, stock investors go through all of this because they want a better return on their money, vs. investments like money market funds.

But get this: Ever since 2002, S&P 500 investors suffered through years of hand-wringing for nothing. The sad truth is that they did worse than if they'd held money market funds.

Read this excerpt from the double-issue May-June Elliott Wave Theorist:

The entire 12 years has been a lot of sound and fury for nothing.

The recovery from October 2002 lasted 5 years and brought the S&P up 102%. The recovery from March 2009 lasted 3 years and brought the S&P up 110%. Of the past 12 years, the market has risen for 8 years and fallen for only 4. Despite having rallied for twice the time that it fell over this period a dozen years, the S&P on April 2 was still 8% below where it started (see chart below).

You wouldn't know that the S&P 500 had lost ground since 2002 by listening to the market's cheerleaders. They talk as if they've never left the bullish atmosphere of the 1990s.

What do you think about the market right now?

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Tags: buy and hold, CRB index, Fibonacci, investment decisions, long-term trend, market forecasts, mutual funds, S&P 500, volatility

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