When Might We See New Stock Market Highs?
by James Stack, editor
InvesTech Research
Fortunately
for us, this question has been answered by Steve Leuthold of
the Leuthold Group. But most investors won't like the answer.
The Leuthold team constructed
some models with assumed rates of return in order to calculate
just how long it might take for the Nasdaq or S&P 500 Index
to return to their old early-2000 highs. The tables shown here
reveal how many years it will take for investors in these indices
to climb out of the hole that is, to recoup their losses.
| S&P 500 | ||
| Market Peak | 1527.46 | (Mar. 24, 2000) |
| January 31st Close | 885.70 | |
| Back to Peak From January 31st Close | ||
| At
9.0% Compound Growth At 10.0% Compound Growth At 12.0% Compound Growth At 15.0% Compound Growth |
6.5
Years 5.8 Years 4.9 Years 3.9 Years |
|
| Nasdaq | ||
| Market Peak | 5048.62 | (Mar. 10, 2000) |
| January 31st Close | 1320.91 | |
| Back To Peak From January 31st Close | ||
| At
9.0% Compound Growth At 10.0% Compound Growth At 12.0% Compound Growth At 15.0% Compound Growth |
15.0
Years 13.5 Years 11.3 Years 9.0 Years |
|
For
example, if the S&P 500 manages a 9.0% annual return, it
will require 6.5 years (from January 31st level) before the S&P
sees new highs. At a hefty 15.0% return, it will still take almost
4 years.
Naturally, with the
bigger bear market losses, the Nasdaq Index needs much longer
to mend. A full 15 years at 9% and almost a decade (9 years)
at 15%.
Editor's Note: James
Stack is editor of InvesTech Market Analyst, 2472 Birch
Glen, Whitefish, MT 59937, 1 year, 17 issues, $190. Visit the
web site at www.investech.com.
