Skip to main content

Optimal Wealth & Investments, Inc.

The "Lost Decade": 2000-2009

The “Lost Decade”:  2000-2009

In the investment world, many investors refer to the first decade of the 2000’s as the Lost Decade.  Is this a true statement?   In the United States, the capital markets were coming off of some very profitable years in the 1990’s with significant capital appreciation in the NASDAQ and S&P 500.   For the 10 years starting 2000, however, the returns for these well known indices were muted, or worse yet, negative.  To the extent an investor was invested in investments that tracked these indices, the answer is a clear and resounding YES

Was it Really “Lost” for Everybody?

This is also a clear answer.  The answer, however, is the direct opposite.  Other indices, maybe less prominent, fared well on an absolute basis and quite well on a comparative basis.  International, emerging market, small/mid cap, commodity, and value-based investors were some of these categories.  If an investor owned investments in these categories, it was likely the answer is NO.   The decade of investing was fruitful, despite some pain that almost everybody felt in 2008. 

When the year 2000 started, the world was grasping how the internet would change the landscape of commerce, communication, and connectivity for consumers and companies.   The change experienced over the last 20+ years has been drastic, maybe even mind blowing.  Even though the years 2000-2009 were shaped by the internet, the investment arena was repricing assets as commodity prices increased, US dollar weakened, inflation increased, and interest rates flat to rising.  The result was a complete shift in market leadership over this decade.   The leading sectors of the 1990’s (particularly technology) became the laggard for the 2000’s.  If an investor was able to navigate the changes, then the investment returns followed suit.   If an investor stuck with what worked in the 1990’s, they likely experienced negative returns. 

The capital markets may be in the middle of a shift now.  We don’t know.  Is the inflation currently present “transitory”, or here for a while?  Are you ready to address your investments and make changes if the capital markets make another full transition?   How is my 401(k) positioned?  Does my financial advisor make any substantial changes?   How is my DIY portfolio positioned?   How would a “lost decade” affect my plans to retire? 

Nobody wants another “lost decade”.  A second opinion for most of life’s important decisions are warranted.   The viability of your financial future should be no different.  Please reach out for an evaluation of your situation, it will be well worth your time.    

 

Adam Chaney
www.optimalwealth.net
Certified Financial Planner, CFP®
Chartered Retirement Planning CounselorSM (CRPC®)
Accredited Portfolio Management AdvisorSM (APMA®)
https://www.linkedin.com/in/adam-chaney-cfp-81193210 

Securities & advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC
Past performance does not guarantee future performance.  Investing involves risk including loss of principal.