S&P 500 (Large U.S. Companies)
Down 38.49% in 2008
Up 23.45% in 2009
EAFE Index (Large International Companies)
Down 45.09% in 2008
Up 27.75% in 2009
MSCI Emerging Markets Index (International Companies from Developing Nations)
Down 54.48% in 2008
Up 74.50% in 2009
The trend is quite similar for many other stock indices in 2008 and 2009 and the positive returns are even more dramatic from the point the markets bottomed on March 9, 2009.
Pessimists might say that although we have seen positive returns in the markets of late, we still aren't back to the 2007 peak and we don't know where we're going from here. Both of these points are valid, but a more positive view would be that we've made great progress in coming back and the markets (which typically forecast 6-9 months forward in the economy) are forecasting significant economic improvements.
A couple conclusions from this short analysis would be that markets are volatile (2008-09 were an extremely dramatic example) and that investing is a long-term proposition with bumps along the road. This recent period once again confirms the need to have a realistic, diversified investment plan and to stay disciplined through the ups and downs.
