Dispelling myths about the 1930s stock market

This is a great article by Mark Hulbert from Barrons. Here is a snippet:

MYTH 1: It took 25 years for the stock market to recover its losses from the high reached just before the stock market crashed in October 1929.

It’s easy to see why investors believe this myth to be true: It wasn’t until Nov. 23, 1954, that the Dow Jones Industrial Average closed above the level at which it closed on Sept. 3, 1929, the date of its closing high before that year’s crash. That’s a recovery period of more than 25 years.

If the recovery from the bear market over the last year and a half were to take the same length of time, the Dow wouldn’t again close above its all-time high from Oct. 9, 2007, of 14,164.53 until — you’d better sit down — Dec. 28, 2032.

The truth, however, is that it took stocks far less than 25 years to recover. According to Wharton finance professor Jeremy Siegel, the inflation-adjusted total return index of the U.S. stock market was just as high in late 1936 and early 1937 as it was at its precrash peak in 1929. That was less than eight years later.

That may not be great news to investors who are hoping to recover their bear market losses in just one or two years. But it’s a whole lot better than taking 25 years to recover those losses.

Here is the link: Myths of the 1930s