The Uncommon Average Since 1926, the US stock market has returned 10% a year on average, but the road to 10% has been bumpy. Returns in any given year have ranged from as high as 54% to as low as -43%. In fact, the S&P 500 had a return within plus or minus 2% points of this 10% average in only 6 of the past 95 calendar years. This uncommon average of the stock market is similar to the uncommon average associated with LeBron James. LeBron has averaged 27 points, 7 assists, and 7 rebounds a game during his entire …
Cool Market Facts for Hot Summer Days
#1. Don’t Wait for a Correction A person who invested $100 in the S&P 500 in 1960 and never sold would now have $43,132. An investor who employed a “buy the dips” strategy of buying in 1960, selling at new all-time highs, and waiting for a 10% correction before buying back, would have just $534. #2. How the Mighty Have Fallen In September 2000, General Electric was the world’s largest company, valued at almost $600 billion. Now, 21 years later, its value is $113 billion, about an 80% drop. What we’d always hear back then: “Just put your money in …
Do Downturns Lead to Down Years?
See for yourself… US Market is represented by the Russell 3000 Index There’s always a drop coming. We don’t know when or by how much. But it’s coming…just like the next Tom Brady Super Bowl victory. What’s more important is the overall effect on our behavior of these yearly drops. Many people get spooked and sell, understandably. It can be scary. But it shouldn’t be surprising. What may be surprising is the resiliency. Every year, a drop. Yet 16 out of 20 led to a positive return for the year. Would you have guessed that? Drops are short term. Resiliency …
Patience in Investing: 2021 Update
The market is strange, isn’t it? Covid hits. The human toll is heart-breaking. The economic toll is gut-wrenching. And then there’s the market. A dramatic fall beginning on February 20th of last year in response to the pandemic screeched to a halt just a month later, bottoming out on March 23rd. We haven’t looked back since, rocketing past pre-Covid levels to all new highs. At the bottom, nothing was yet better in the world, and it seemed like it never would be. Nonetheless, up went the market. Did you stay put? This is the 5th edition of this chart, and …