The Sad Story Of Bank of America (BAC)

The entire financial complex has been an abysmal performer over the last 52-weeks, and Bank of America BAC has been a particular standout to the downside in this sector. The utter inability of the financial stocks to lift in this bull market is bound to give many investors pause. This is not a good sign. If a real, sustainable recovery is underway it is hard to reconcile investors' aversion to this area of the market. Bank of America (BAC) has been beset by problem after problem since the implosion of the housing market. Over the last 5 years, shares have fallen around 76%. In 2007, this was a $50 stock. Today BAC trades at $12.14. Over the last 52-weeks, the stock has lost 25%, compared to a gain for the S&P 500 of almost 21%. Management has repeatedly assured investors that the company was on its way to turning a corner, but this has primarily been lip service. Bank of America has been beset by mortgage servicing problems, lawsuits, and obstacles relating to new financial regulations in 2011 and this has taken a corresponding toll on the stock price. One would have to believe that if the economy is truly on its way to sustainable growth, this stock will turn around eventually, but given the continued pessimism in the financial sector, many investors remain wary. On the other hand, BAC and other financial stocks, are likely the riskiest investments in the case of another recession or an all-out crisis. When it comes to financials, it is an "optimists only" type of investment right now.