From the Weitz Funds Quarterly Report, December 31, 2008
On an historical note, at a time when the media makes regular references to the Great Depression and the bear market of the 1930’s, the Leuthold Group offers some interesting statistics. The average annual total return for the S&P 500 for the 10 years ended November 20, 2008 was -2.7%. This matches the worst 10-year performance in stock market history—1929-1939. So, we have just completed a 10-year period during which the stock market was just as bad as the 1929-39 market.
Also, according to Leuthold, roughly 5% of the ten-year periods since 1926, have produced S&P 500 returns of less than 1% per year for the ten years. Each of those flat-to-down markets was followed by a ten-year period of strong returns, ranging from 101% or 7.2% per year (Q4 1938 to Q4 1948) to 325% or 15.6% per year (Q3 1974 to Q3 1984).