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Originally Posted by Slava
Let me try to explain this a different way though; its only a lost decade because the indexes are cap weighted. If an investor had bought an equal proportion of every stock in the index they saw an increase of 66% through that so-called lost decade.
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On average, people's portfolio's are cap weighted, because by definition they have to be.
Quote:
Originally Posted by Slava
Your point is that no one made money, and it was a terrible time to be invested. My point is that this didn't have to be the case at all. Firstly, people could've invested differently and made money. There is ample evidence of investors making money, regardless of what they chose to invest in. They could've been less greedy and less fearful at times and made money as well (and Cowperson provides evidence above of the fact that a lot of this comes down to fear and greed in the first place).
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Umm, nope, to the bolded part. Obviously I haven't expressed myself very well. My point was that ON AVERAGE stock market investors made very little money so far this century. To those for whom that comprises their entire investing life, that causes a perception that stocks are an unattractive investment choice. That perception is likely incorrect, but explains why many are prepaying mortgages versus buying equities.