Stock investors who have been patient are poised to celebrate the best run in the market since the late 1990s.
The S&P 500 Stock Index is just days away from ending 2014 by posting another year of double-digit gains. After sell-offs in October and this month, the market is at record highs again as the year comes to a close in the week ahead.
While this year's gains may be half of what the index returned in 2013, last year saw a better than 30 percent annual return on an investment. With another double digit return this year the S&P 500 rally will enter its fifth year.
And $100 invested as 2009 dawned has turned into more than $250 today. That's an annual return rate of more than 20 percent per year through the European debt crisis, the fiscal cliff, three divisive elections and the introduction of Obamacare.
The gains this year came from almost every major stock sector. Thanks to the drop in oil prices, energy stocks were a drag on the index, as were basic material companies struggling with a difficult global economy. Technology, health care and consumer companies more than made up for that commodity-based weakness.
Sure, there are plenty of reasons to help explain the bull market in U.S. stocks: a recovering American economy, improving corporate profits, record low interest rates and inflation. The inevitable list of best stocks of the year may create buyers remorse if you
missed out. (Or sellers remorse if you sold early). But 2014 serves as another illustration of the axiom of patient, diversified and low-cost investing.
Financial journalist Tom Hudson, host of "The Sunshine Economy" on WLRN-FM in Miami, can be followed @HudsonsView.