Stock Market Trends 2000-2010

   

The turbulent nature of stock trends means that the nature of investing has a certain degree of uncertainty involved. However, looking at past investment and stock trends is a good way to understand a bit more about the market and to gauge your choices for the future. The past decade in particular saw its fair share of economic strife, leading to a rise in investment trends that are likely to continue into the upcoming years. Here, we’ll take a brief look at some of the more notable investment trends of the ’00s.

Energy Sector Stocks

As stated by reporter for the New York Times Jennifer Schultz, “the best-performing stock of the decade was in the energy sector” despite many stock market commentators declaring last decade “the lost decade for stock investments.” Here are some figures from Schultz’s piece:

  • Southwestern Energy (SWN) was the best stock performer last decade, achieving a gain of 5,778% or 50% on an annualized basis.
  • Standard & Poor’s energy sector delivered the highest cumulative total return among sectors with 148% and dividends of 45%.
  • Despite 500 annualized total returns, the past decade’s total return loss was 0.95%, which is the first total return loss for a decade in the history of the index.

Furthermore, market commentators believe that the steady increase of oil prices and the green movement has inspired investors to focus more attention on alternative energy. This stock trend has persisted through to this decade, with solar, nuclear, wind, wave, and broad clean energy being identified as top investment opportunities by several publications.

Savings

Last decade saw two stock market crashes which, according to Boston University professor of finance Zvi Bodie, “has just made the current generation of investors more aware that [the market] is risky even over a decade or more.” With a low savings rate throughout the decade, the ’00s were harsh times for individuals who were looking into short-term stock investments because most sectors reported few gains overall. Moving forward with a recovering economy, investors and stock trends experts are placing more emphasis than ever before on making calculated and informed investment decisions.

Experts maintain that the worst of the economic downturn is finally behind us, and most investors today are beginning to move from low-risk, low-yield investments to higher-risk (but higher-yield) instruments, albeit with a grain of salt. Overall, an emphasis on opportunities for investments with long-term growth will continue to be one of the lasting effects of the previous decade.