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The GFC is almost over for investors

Most investors will remember the GFC with some disdain. Many went to cash and missed the recovery, while even a fair proportion of those who stood firm are still nursing some losses.

According to S&P CaptalIQ, the ASX / S&P 200 (ASX: XJO) (Index: ^AXJO) peaked at 6,828.7 on November 1st, 2007. The benchmark now stands at 5,157.7 – some 24.5% below that all-time high.

Of course, history will show that 2007 was a period of irrational exuberance, but it’s also true that very few people saw the GFC on the horizon.

The market did hit a low of 3,145.5 in the wake of the GFC, so the recovery, at least in percentage terms, has been impressive – a gain of 64%, excluding dividends.

Helpfully, CapitalIQ also provides a view of that same index with dividends reinvested. On that scale, the index is a mere 2.4% below breakeven for investors – not a bad result (but not exactly spectacular) and a much better view than you’ll get from the raw numbers.

Of course, picking high and low points is an exercise in cherry-picking. Taking a longer-term perspective, we see the ASX 200 up 64% over the last 10 years in price terms alone, and a much healthier 153.1% when dividends are included.

And it wasn’t all bad news. Over that same 10-year period, Computershare (ASX: CPU) rose 410%, Energy World (ASX: EWC) put on 2,140% and the company behind realestate.com.au, REA Group (ASX: REA), gained 8,900%.

Foolish takeaway

In this Fool’s opinion, trying to time the market is a mug’s game. Very few people foresaw the GFC, and of those who did, I expect a very, very small proportion will accurately forecast the next slump. In the end, the old methods are best. Finding great companies and paying attractive prices pays off.

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Motley Fool advisor Scott Phillips does not own shares in any company mentioned in this article

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