S&P 500 Returns

Anyone who put money into an S&P 500 index fund between late 1998 and early 2001 experienced a cumulative loss, as of January 21, 2012. Adjusted for inflation, the S&P lost 18% from August 2000 to January 2012. According to Yale economist Robert Shiller, this has never happened to the U.S. stock market, even if one were to go back to 1871. Even those who bought on the eve of the 1929 crash experienced a brief gain, in inflation-adjusted terms, in 1937. Although the S&P 500 has not done particularly well over the past 10+ years, an equal-weighted S&P 500 index returned 52% from August 2000 to January 2012. The equal-weighted approach means a much larger weighting in value stocks.