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EZ money on Wall St
Old 11-26-2018, 04:29 PM   #1
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EZ money on Wall St

The S&P 500 as returned 13% per year since March 2009. Many said expect mid single digit returns. Does anyone feel entitled to more above historical trend returns going forward? What has caused above average returns since 2009 & do you feel comfortable factoring in double digit returns for the next 10 years?
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Old 11-26-2018, 04:32 PM   #2
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I would be very happy with 7% nominal for the next 10 years.
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Old 11-26-2018, 04:35 PM   #3
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Old 11-26-2018, 04:38 PM   #4
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+1 - yeah 7%
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Old 11-26-2018, 04:41 PM   #5
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My retirement fund spreadsheet assumes 6% annual return (nominal).
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Old 11-26-2018, 04:56 PM   #6
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Same here, nominal 6%. Actually I have 5 time periods defined and can adjust expectations based on age since I plan on changing AA (and expenses) over the years.
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Old 11-26-2018, 04:59 PM   #7
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Yes. Entitled to it!

Seriously, I'll be ecstatic if we get 3% real over the next 10 years if its nice and smooth.
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Old 11-26-2018, 05:11 PM   #8
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Same here, nominal 6%.

May be a “Midwestern thaing”.
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Old 11-26-2018, 05:17 PM   #9
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Quote:
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The S&P 500 as returned 13% per year since March 2009. Many said expect mid single digit returns. ...
Goes to show that many people have no idea.

Quote:
Originally Posted by Free bird View Post
... Does anyone feel entitled to more above historical trend returns going forward? ...
Makes no difference if you feel entitled or not. Market doesn't care. Market will do what market will do. I don't feel entitled to anything.


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... What has caused above average returns since 2009 & do you feel comfortable factoring in double digit returns for the next 10 years?
I'd bet you couldn't get much consensus on the cause for the past, let alone the future.

I don't feel comfortable or uncomfortable, because I don't factor in anything. Market might be negative over the next 10 years, it's happened before. Better be ready for that.

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Old 11-26-2018, 05:22 PM   #10
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What has caused above average returns since 2009 & do you feel comfortable factoring in double digit returns for the next 10 years?
My opinion, and it is just an opinion, is the above average returns came about from the below average returns the ten years previous.

A reversion to mean.
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Old 11-26-2018, 05:37 PM   #11
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From Oct 1989 to Oct 1999 return was almost 11%. So you might be right. Could be a skinny 10 year run coming up.
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Old 11-26-2018, 06:13 PM   #12
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My retirement fund spreadsheet assumes 6% annual return (nominal).

Yes, mine too.
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Old 11-26-2018, 06:34 PM   #13
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The amazing average returns since March 2009 are mostly because the market indexes had been more than cut in half between Oct 2007 and Mar 2009.

You get vastly different statistics depending on where you start measuring.
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Old 11-26-2018, 07:18 PM   #14
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I will be happy to just outpace inflation.
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Old 11-26-2018, 07:37 PM   #15
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In the last 39 years the S&P 500 has payed 5.5%. Just doesn't seem like all that good considering the volitility one must endure.
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Old 11-26-2018, 07:39 PM   #16
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So were really out of plumb the last 10 years. I'd say reversion to the mean would be just around the corner if I was a betting man. But I'm not a betting man. I'm a freebird.
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Old 11-26-2018, 08:09 PM   #17
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In the last 39 years the S&P 500 has payed 5.5%. Just doesn't seem like all that good considering the volitility one must endure.
Source?

CAGR of the Stock Market: Annualized Returns of the S&P 500

That link says about 12% from Jan 1979 to Dec 2017.

Did you include divs? Even w/o divs, that source says 8.9%.


$1.00 grew to: $83.20

That checks out in a calculator: 1.12^39 ≈ 83.081224 (some very slight rounding on the 12%).

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Old 11-26-2018, 08:16 PM   #18
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Your right that 5.5% did not include dividends.
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Old 11-26-2018, 08:19 PM   #19
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8.3% inflation adjusted.
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Old 11-26-2018, 08:20 PM   #20
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From October 1979 to October 4th 2018. How do you get 12%?
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