Capital Formation Over the Past 12 years ... 1.6% annualized!

Old_Skeet

In several previous post I refernced capital formation was seeming hard to come by. I have linked below a chart I recently came across on the Crossing Wall Street site that shows that the S&P 500 Index over the past twelve years has only a 1.6% annualized return with dividends reinvested. Seems CDs, a no risk investment, would have been a better option.

In addition, if one were to consider inflation at 2% per annum, then the index becomes a net loser to inflation.

No wonder, money seems to be leaving the market. You just can not park it there ... forget about it ... and, come back another day. Seems some sort of investment strategy that centers around an entry and exit point(s) would have made a net loser a net winner. Perhaps there is something to exiting when the price line moves below the 200 MAD line and then returning when the price line moves above the 200 MAD line. Something to think on.

http://www.crossingwallstreet.com/archives/2012/08/sp-500-total-return-index-6.html

Good Investing,
Skeeter

MaxBialystock

S & P. Which is why I'm glad I'm heavily tilted elsewhere...Russell 2000, overseas, EM bonds. Soon will add domestic bonds. I own dom. bonds so far only within balanced fund MAPOX.