Now that 2009 is over, I have bad news and I have good news.
First the bad news. According to the Wall Street Journal, stock performance in the decade now ended was the worst ever – worse even than the woeful 1930s. For the past ten years, the value of NYSE-traded stocks has declined by an average of 0.5 percent a year. Compare that to the 1990s, when the average annual increase was an incredible 17.6 percent.
Factor in inflation and it gets even more depressing, with the S&P 500 declining an inflation-adjusted 3.3 percent annually. During the 1930s, stocks showed an inflation-adjusted (deflation, really) annual gain of 1.8 percent. And the decade now ending saw many notable companies fall out of the S&P 500, for reasons of scandal (Countrywide, Enron), excess (Bear Stearns, Merrill Lynch, Lehman Brothers, Wachovia), misfortune (Circuit City, Lucent, Reebok) and just plain changing dynamics (AT&T, Compaq, Dow Jones & Co., Maytag, Wyeth).
Pretty discouraging, when you think about it. But here’s the good news. The vast majority of American corporations found a way to move ahead during the turbulent ten years past, and all of them – all of us – are the stronger for it. We face challenges ahead, but having muddled through the most difficult decade in two centuries we’ll face little that will surprise us. And those of us who have maintained our focus, kept our nerve and remained consistent throughout should profit all the more.
Here’s to 2010, the dawn of a new decade. May the old one rest in peace.
[Note: Today marks the one-year anniversary of this blog. Prior to launching it last December I wondered – and worried – if I would have enough to write about. If there’s any silver lining to the year now past, it’s that it provided plenty of content for a blog called “When Growth Stalls.” Let’s hope next year is a little tougher on me.]
Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of “When Growth Stalls: How it Happens, Why You’re Stuck, and What To Do About It.” Learn more about him at www.WhenGrowthStalls.com and at https://twitter.com/whengrowthstall.