(MoneyWatch) U.S. stocks started the day at an all-time high Tuesday as measured by the Wilshire 5000 Total Return, the broadest equity index. Shares eclipsed the old mark set on Oct. 9, 2007, by 1.4 percent.
If you had invested in the Vanguard Total Stock Index fund ETF (VTI), which follows a similar index at the highest pre-crash closing price on October 9 of that year, you would now be up 0.8 percent. By comparison, the S&P 500 Index (which excludes dividends) is down 10.8 percent over the same period. Indexes like the S&P 500 and Dow Jones Industrial Average distort market performance because they encompass a more limited selection of stocks and exclude the portion of returns investors get from dividends.
In October of 2007, U.S. stocks looked likely to enjoy a fifth consecutive year of gains, with many market experts predicting further increases. Although real-estate gains were slowing, conventional wisdom dictated that home prices would never fall on a national basis. Lehman Brothers and AIG (AIG) were powerhouses of the financial services industry.
Yet only 517 days later, on March 9, 2009, stocks had plunged 55.2 percent amid a collapse in the housing and financial services sectors. On the day stocks bottomed out, USA Today speculated that it could take decades before stocks would hit a new high. Cash was king, and fears of a major economic depression were rife.
With the U.S. economy now appearing to thaw, it turned out to have taken just over three years -- specifically, 1,100 days -- for stocks to reach a new high. Stocks rose 126.5 percent during this time period, with virtually every asset class except cash appreciating in value.
Following is a brief statistical synopsis of stocks' roller-coaster ride over the past four and a half years:
-- Stock crash (10/9/07 - 3/9/09) 517 days to lose 55.2 percent
-- Stock surge (3/9/09 -3/13/12) 1,100 days to gain 126.4 percent
-- Total period (10/9/07 - 3/13/12) 1,617 days to best previous high by 1.4 percent