In 2008 large financial firms suffered the biggest declines in share prices of any industry, falling by 56% overall. In 2009 they rose by 28%, but were still 52% below their peak of May 2007.
The Morgan Stanley Capital International (MSCI) world index tracks the equity returns of the world’s 1,500 largest companies. Though the index gained 27% last year, it is still 31% below the peak it hit in October 2007. IT and telecoms firms never recovered from the dotcom bust in 2000, though IT companies posted strong gains in 2009.
Nevertheless, the direction is clear: the markets are recovering. This is certainly good for the economy. I just hope that necessary structural changes in the “system” will be dealt with. Otherwise, I am afraid that the cycle will start all over again.