August was a rough month for the stock market. So rough, in fact, that what started off as a promising year for stock investors now looks decidedly less so, with the total stock market now off more than six percent year-to-date.
Further reinforcing the dour mood is the “lost decade” we’ve just endured. While my colleague Allan Roth and others have pointed out that the past ten years were far from “lost” for investors who bought and held a prudently diversified portfolio of stocks and bonds, the fact of the matter is that domestic stocks have an outsized influence on the mood of investors. When they’re going up, we feel a bit wealthier; when they’re falling, we feel a bit poorer.
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