As investors look back on the past 10 years, many will realize better returns could have been found almost anywhere else besides the stock market.

According to the Wall Street Journal, since the end of 1999, stocks on the New York Stock Exchange “have lost an average of 0.5 percent a year, thanks to the twin bear markets this decade.” The 2000s look even gloomier when the impact of inflation is considered.

“In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s,” the Journal reported.

One professor has compared this slump to the 1930s but said the 2000s were even worse. In order for the decade to come out ahead of the 1930s, the stock market would have to increase 3.6 percent before the end of the year, the professor estimated.Although stocks rarely go through extended periods of decline, the past 10 years serve as a reminder that this can and does happen.

Investors were hit hard by the downturn in the economy in the past decade but are expecting the New Year to be one of moderate economic growth, benign inflation, and solid returns in global equities, according to the Bank of America Merrill Lynch Survey of Fund Managers.

Optimism about the economy strengthened in December, and a net of 80 percent of survey respondents expect the world economy to grow over the next 12 months, a notable increase from the net 69 percent who expected this in November.

In addition, two-thirds of investors expect equity markets to return to traditional growth levels or better.

“Investors are nervous but optimistic heading into the New Year, and respondents are looking for a 7.7 percent total return from global equity markets,” said Michael Hartnett, chief global equity strategist at Bank of America Merrill Lynch Global Research.

At their highest level since December 2003, expectations for corporate profits have notably increased, supporting demand for greater capital expenditures. While most investors at the beginning of 2009 thought companies were over-investing, a net 48 percent of investors now say companies are under-investing.

Concern about inflation remains subdued, and a growing proportion of survey respondents do not expect interest rate hikes from the Federal Reserve before the second half of the year.

Marking a monthly swing of 17 percent, a net 28 percent of respondents are now underweight bank stocks compared with 11 percent in November. In spite of sharp movements out of bank stocks, most investors are going into 2010 with a positive outlook.

“A year ago, strong pessimism over bank stocks would have spread across the market, but now it appears to be isolated to the banks,” said Gary Baker, head of European equity strategy at Bank of America Merrill Lynch Global Research. “Investors seem to be saying they can be optimistic on markets even without bank support.”