The "Death" of Equities
The infamous 1979 BusinessWeek cover was published at the tail end of a tumultuous decade in geopolitics, the economy and the stock market. Money was treated far better in cash than it was being invested. This is a humbling consideration if one is reliant on high portfolio returns, and will very well happen again in the future. When and for how long, no one knows.
"In short, the financial markets are so eccentric that for more than 10 years the largest returns have come from taking the fewest risks. Indeed, by constantly rolling over short-term paper, investors have beaten returns on stocks and bonds by a considerable margin. “That’s not the way it’s supposed to work,” says an investment banker."
Fortunately for the baby boomers, most of the damage had already been done by the time this cover was published.
By the early 1980's, inflation peaked and things began recovering. The returns1 since 1983 have been extraordinary:
Stocks + 7,930%
Bonds + 1,060%
Housing + 515%
Those are annual returns of 11.4%, 6.2% and 4.6%, respectively.
Don't throw in the towel when things get hard. Going through hard is a prerequisite for what's to come.
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Source: The Death of Equities (Big Picture) / The Luckiest Generation (Ben Carlson)
1S&P 500, Barclays Aggregate Bonds Index and Case-Shiller National Housing Index.
