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31 Years of Stock Market Returns

The website, "A Wealth of Common Sense" has a unique chart that displays the annual returns of the stock market for any given start date (since 1993) and number of years. Very interesting.

https://awealthofcommonsense.com/2024/09/31-years-of-stock-market-returns/

Comments

  • Interesting stuff...but anyone who thinks the stock market is not risky over time is delusional and driving looking in the rear mirror...it is very risky...see cost of long dated puts, shouldn't they get cheaper the longer out you go? You could dig up and research anything looking backwards and put some spit on it and make it look shiny...

    Out of all those guys at Ritholtz I like looking at what Ben says the most...let's see what happens when the CBs and govt doesn't keep printing, keeping monetary conditions loose, insane fiscal policy, etc...what happens if the US dollar is no longer the reserve currency? Isn't there some meeting taking place this month when the "other side" (meaning China, Russia etc) is getting together to discuss currency? Have Ben run the same chart for Japan...what does that look like?

    A lot of these guys writing these what I call soft tosser books, blogs, podcasts have never had real challenges such as prolonged inflation, deep recessions...they all seem to have come of age after the GFC...maybe that is why they have been successful, no fear, no emotional baggage of the knowledge of what could happen...and maybe still have the piss and vinegar to go for it so to speak...

    Anyways, I like the post @mnsdedwards, thank you

    Baseball Fan
  • edited September 2
    I’m in rare agreement with @Baseball_Fan on this one.

    Yes, over the long haul markets go up. Equities beat cash and bonds over very long periods. It’s been demonstrated that dead investors outperform living ones. But there are always lurking the unknown / unexpected downdrafts. When these ”ripples in space time” do occur investors often react irrationally. Dump and run is pretty common unless maybe you’re a ”steely-nerve” manager at a big investment house, hedge fund, pension fund or endowment with a sizable amount of your AUM locked-up for years.

    Most of us mere mortals invest in the real perceived everyday world. Setting a 25-30 year time horizon and then shutting your eyes is harder than it might sound. The fact that we are visiting this site is proof we haven’t shut our eyes to our investments. When a ‘29 or 2,000 or ‘08 comes along, it feels like the morning after drinking a bad bottle of booze. Lying flat on the floor, common sense and rationality often fly out the door.

  • beebee
    edited September 2
    image
  • Awful lot of green on that chart... not afraid of a little red from time to time. Asset allocation is key.
  • edited September 2
    Here’s the total wreckage over 17 consecutive months (‘07-‘09). The ‘07-‘09 bear market was one of the shortest in history.

    Wikipedia ‘07-‘09 Total Bear Market Losses

    NASDAQ - 55.63%

    S&P 500 - 56.78%

    DOW - 53.78%


    image

    The chart above shows how digging out of a hole is more difficult than falling into one.

    Yep - watching more than half of your investment money disappear over 17 months represents just a little “blip” in the longer term picture. (I’ll drink to that.)

    Plus - The Fed “put” (known at the time as ”quantitative easing”) will be there next time around to arrest the decline and will be able to break the fall after it exceeds 50%.

    To the Fed: “How do I love thee? Let me count the ways ….
  • NASDAQ - 55.63%

    S&P 500 - 56.78%

    DOW - 53.78%

    ###

    Only paper losses unless you lock them in.

  • What a difference a date makes
    8,760 little hours
    Brought the returns and the pleasures
    Where there used to be pain
  • Hi@Anna
    Yes, INDEED !!! 8,760 hours, one after the other.....
    Our house is completely and fully acknowledged that we are where we should be with financial comfort; from becoming informed investors and students of sound monetary practices starting in the late 1970's, and mental reasoning; which should include a large amount of prudence; or call it 'common sense'.
  • edited September 2
    +1 Anna & Catch.

    Rarely do we share our age or what our investments are intended for. If you are 25 - close your eyes. All will be well. If you are 50, maybe squint a little. But if you are over 75 and counting on those investments to sustain you and yours thru your lifetime, tread very cautiously.
  • except when you’re over 75 the number of years you have to fund left are less than 20 and very possibly less than 10
  • :( Thanks for reminding me of that. It was a very nice day until now...
  • edited September 2
    Old_Joe said:

    :( Thanks for reminding me of that. It was a very nice day until now...

    Ditto. Time for an “old-geezer” drink! / Where the hell did I put that bottle of prune juice … ?

    :)
  • You guys are pouring on the pessimism a little thick here, don't you think? Like Emily (below) I'm planning for a future that's a little brighter.

  • edited September 2
    Asset Allocation Models by Age (Offered “for consideration” by T. Rowe Price)
  • edited September 2
    msf said:

    You guys are pouring on the pessimism a little thick here, don't you think? Like Emily (below) I'm planning for a future that's a little brighter.

    I don't know who Emily is; but if you own your house, and your cars, free and clear, it's a lot easier to figure out where happiness might be.
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