ForecastChart.com tracks 22 stock market indexes. In the ten years ended in September 30, 2009, the best performing index was IPC Mexico with a gain of 486%. The worst was the Nikkei 225 (Japan) with a loss of 44%. The Dow Industrial Average was ranked twelfth with a loss of 6%. European stock markets had poor results as well. But Hong Kong and Singapore have done far better. Bear in mind that these percentages represent returns in the local currency and have not been adjusted to reflect returns for a U.S. Dollar based investor.
From the late sixties through the early eighties, the Dow experienced seventeen grueling years in which it made no sustained upward progress. The Dow is now in its ninth year of sideways / downward movement. There could be many more.
ForecastChart.com’s 108 year chart of the Dow Jones Industrial Average shows both periods. You can see that the Dow has basically made no progress since the year 2000. In that site you may also view a 15 year chart of the Mexican stock market. The Mexico IPC has been prospering while the Dow has taken a beating. The horrible 20 year bear market in Japan may be viewed as well.
Could it be that the old economies are getting older and the developing nations are having growth spurts with lots of remaining upside potential? If that’s the case, the U.S. investor may have to wait a long time to see Dow 14,000 again. On the positive side, U.S. demographics are stronger than that of Europe and Japan. The U.S. also has a growing population (thanks to immigration). Hopefully, those differences will translate into higher equity returns in the U.S.