A Look at the Long View

Since the start of the century (and millennium), the stock market has been a disaster. Taking a step back to look at the numbers, it’s truly remarkable.

From the end of 1999 to the end of 2011, the S&P 500 dropped 13.58%. Dividends added 23.59%. But over those 12 years inflation was 34.69%. That adds up to a real total return of -20.70%.

You would often hear money managers say that the real long-term return of the stock market was 8%, and that’s what it was from 1925 to 1999. But the last 12 years have been so bad that it’s taken that 8% number down to 6.58%.

This means that historically, the stock market more than doubles your money in real terms every 12 years, but over the last 12 years, it’s down 20%.

Posted by on January 3rd, 2012 at 11:01 am


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