The Financial Lesson of 2008-09 That Most Investors Have Forgotten

If your memory minimizes how much you lost in the last bear market, you can easily overestimate how brave you will be in the next one

If 2000-2009 was the Lost Decade for investors, 2010-2019 was the Decade of Forgetting.

In March 2008, E.S. Browning wrote for The Wall Street Journal that “we may be in another lost decade” for stocks, like the Great Depression and the 1970s. He was right. Stock investors had their wealth slashed in half twice, in 2000-02 and 2007-09. All told, the S&P 500 had an average annual total return of negative 0.95% from 2000 through 2009. To end the decade barely below where they had started, investors had to endure a brutal...