The Lost Decade: S&P Annual Return Just 2.5% Since 1998

Sean Maher submits:Most investors use a microscope to analyze markets, when a telescope is of more use, and therefore completely miss the big picture. Over the last decade, equities have underperformed bonds by the biggest margin in 70 years. The S&P 500 10 year total return to end June 2008 was 32.1%,  while that from bonds (based on the Lehman LT Treasury index) was 86.8%. Not since the end of the Great Depression has there been such a stunning divergence. US real estate could slump another 20% and would still have comfortably outperformed equities over the decade, as would cash, and just about any overseas market, particularly in dollar terms. US stocks have been a lousy investment for a very long time, and the chart below helps explain why.Complete Story »