Today the market as measured by the S&P500 made an all time high. It finally eclipsed the high set in March of 2000. We are happy to see that, as all our systems are either at new all time highs or withing 1% of it as well.

Of course, what that means is that over the last 7 years, if you were invested in the grandaddy of all index funds, the Vanguard 500, even reinvesting the dividends the total return was just slightly less than the return of Fidelity’s money market fund FDRXX, but included a much more exciting drawdown of almost 50%. So what have the markets done over the last 10 years?

Here’s a summary of the total returns over the last 3, 5, 7 and 10 years for the S&P 500, the Vanguard 500 fund, the Nasdaq 100, and the Russell 2000. We’ve also included Fundztrader Select system (which has been real time for 5 years) and the Fundztrader Equity system (real time for almost 2 years).

As you may recall, 10 years ago, much of the press was touting the conventional wisdon of buying and holding of index funds, because we had entered a “new age” and it was reasonable to expect that double digit returns, exceeding the long term average of 11% for the stock market. Just write a check to Vanguard and the market would take care of the rest of your retirement planning.

As the table shows, it didn’t quite turn out that way, and in fact if you had invested in the Nasdaq 100 in March of 2000, you are still a long way away from getting back to even. Even over the last 10 years, we haven’t seen the long term average returns of the market, and that includes some stellar years in 1997, 1998, and 1999.

Botttom line: if you are really concerned about your financial future, find a better plan than buy and hold. But you do need to find a plan that you are comfortable will work over the long haul, because they all have rough patches, and they will only work if you stick with them.