So how are we doing from March 2009 low?

[Lsbcal]

Just updated my chart to the end of January 2012 (blue line). I am rooting for us to follow the 1982 recovery path (red line).

We are now 34 months out from the March 2009 low. All data is inflation adjusted and dividends are included. Current SP500 dividend rate is 2.1% and trailing P/E = 15.1 with estimated P/E = 12.5 .

 

[Midpack]

Cool chart!

 

[ziggy29]

Interesting to see how much this one looks like the recovery after the 1982 low. I'm not expecting it to keep tracking that way for a 17 year bull market, but I wouldn't mind riding it for a while longer and then taking some off the table...

 

[audreyh1]

Yes - very cool chart! Thanks for sharing it.

I'm with ziggy29, I suspect the green and orange lines to be more typical of a secular bear market, so the recovery might top out soon (or already has around 100%) and simply keep up with inflation. Interestingly - this just has us slightly above the peak before the 2008 crash.

 

[justplainbll]

Unadjusted for inflation and taxes:
------APYs-----
From 08/16/02 _ Portfolio__ Equity
To 03/06/09_____ 5.3%___ (0.1)%
To 02/03/12_____ 6.9%____ 7.0%

 

[Lsbcal]

Yes - very cool chart! Thanks for sharing it.

I'm with ziggy29, I suspect the green and orange lines to be more typical of a secular bear market, so the recovery might top out soon (or already has around 100%) and simply keep up with inflation. Interestingly - this just has us slightly above the peak before the 2008 crash.

Audrey, the chart is useful for comparing percentage of rises off of lows (Y-axis values) and for looking at growth rates (slopes on this semilog chart). It is not meant to compare the absolute levels of the SP500.

So you can say that the growth rates of the 1930's and 1980's markets were pretty similar at the 35 month out point because the slopes are similar. In contrast the early 2000's (green line) had a positive slope but not as robust. Still I'd love to see us do that well. And the later 1970's was pretty flat after inflation, a real bummer.

Now although you cannot compare the Y-axis point on the current market (blue curve) to a Y-axis value on another curve (like the green one), it does turn out that we are indeed almost at the peak of the SP500's value in October of 2007. You can see this by looking at a chart for VFINX (Vanguard SP500 index) which includes dividends but unfortunately does not take into account inflation. Such a chart is shown here at M* : http://quote.morningstar.com/fund/chart.aspx?t=VFINX®ion=USA

 

[audreyh1]

Audrey, the chart is useful for comparing percentage of rises off of lows (Y-axis values) and for looking at growth rates (slopes on this semilog chart). It is not meant to compare the absolute levels of the SP500.

Yeah, I got that we were talking about growth rates - % recovery off the low - in real (inflation adjusted) terms. When I referred to the peak in 2007 I simply meant that we had recovered almost (but not quite) 100% in real terms, 90+% I'm eyeballing.

To me the line going flat meant the market gains tracked inflation, but no better than that - 0 growth in real terms after the initial recovery from a crash.

Have I got that right?

Audrey

 

[audreyh1]

I think the S&P500 lost about 50% from 2000 peak to 2002 bottom, so even though the green line shows growth after the crash, the S&P500 never made it to 100% before the 2008 crash, indicating to me that it never recovered completely in inflation-adjusted terms. Not that good!

2007-2009 S&P500 loss was -56%. So we recovered much more quickly than the green line, but maybe that just means we are now going to top out.

The above drops are neither inflation adjusted nor dividend adjusted, but they will cancel each other out to some extent.

 

[daystar]

Net Worth March 1, 2009: $244,545
Net Worth February 1, 2012: 517,684

I lived below my means and maxed out my Roth IRA and 401K each year. However, I also received $51,000 in cash from mommy and daddy during this time period.

 

[Lsbcal]

Yeah, I got that we were talking about growth rates - % recovery off the low - in real (inflation adjusted) terms. When I referred to the peak in 2007 I simply meant that we had recovered almost (but not quite) 100% in real terms, 90+% I'm eyeballing.

To me the line going flat meant the market gains tracked inflation, but no better than that - 0 growth in real terms after the initial recovery from a crash.

Have I got that right?

Audrey

Hi Audrey, sounds right to me. Sorry if I sometimes come across as being a bit too pedantic. Hopefully some sole out there got some help with my "semilog chart 101" explanation. Class is adjurned now.

It is interesting to see how we each interpret these historical charts as we try to guess the direction of that blue line into the future. I don't know where it is going next, but I'm hoping for up-and-to-the-right. Will settle for a slope of the green one but wouldn't it be nice to get on that red line slope.

 

[target2019]

Looks like 5 or 6 years out from the first bust there'll be another one. Since we are almost 3 years out from March 09 low, what are we doing in preparation for the next one?

 

[NW-Bound]

We simply hang on tight and wait for the "Wh***" signal.

 

[ziggy29]

Looks like 5 or 6 years out from the first bust there'll be another one. Since we are almost 3 years out from March 09 low, what are we doing in preparation for the next one?

Periodically rebalancing on the way up, mostly.

 

[rescueme]

So how are we (e.g. me/DW) doing from the time we started investing (1/2/82) for retirement, in the market?

I'll let you decide ...

Clue ->

 

[rescueme]

Looks like 5 or 6 years out from the first bust there'll be another one. Since we are almost 3 years out from March 09 low, what are we doing in preparation for the next one?

Harvesting my gains and adding them to my "retirement cash silo" (yeah, I'm lucky to be on the "other side" TYVM).

 

[brewer12345]

I look at the chart and shake my head. Why? Because people keep telling me we are not in a mean reverting world. Looks an awful lot like the bigger the crash, the higher the rebound.

 

[rescueme]

Looks an awful lot like the bigger the crash, the higher the rebound.

You understand the logic - GFY ...

 

[yakers]

Interesting, a couple years out looks like it would be time to lower equity %,but...isn't that the time when the Fed will no longer hold its loan rate so low, thus possible bigger inflation and the hammering of bonds? Maybe those folks buying Treasury inflation protected bonds at the current low rates are not crazy after all?

 

[arebelspy]

You understand the logic - GFY ...

I haven't seen that acronym used like that.

I had to figure it out, I'm guessing you meant "good for you"?

I've always seen it as "go * yourself"

 

[audreyh1]

It is interesting to see how we each interpret these historical charts as we try to guess the direction of that blue line into the future. I don't know where it is going next, but I'm hoping for up-and-to-the-right. Will settle for a slope of the green one but wouldn't it be nice to get on that red line slope.

You understand why some of us assume otherwise, right? We are supposedly still in one of those 17-18 secular bear cycles (2000 - 2017 or thereabouts) and during these long cycles stock markets tend to go sideways or drop, not gain in real terms like charts that cover secular bull periods (like the red line for 1982-1999).

Audrey

 

[Lsbcal]

You understand why some of us assume otherwise, right? We are supposedly still in one of those 17-18 secular bear cycles (2000 - 2017 or thereabouts) and during these long cycles stock markets tend to go sideways or drop, not gain in real terms like charts that cover secular bull periods (like the red line for 1982-1999).

Audrey

I kind of apply the Heisenberg Uncertainty Principle to markets. Too many moving parts to compute any outcome beyond the current market prices. Still I enjoy future prognostications from knowledgeable sources ... but try to remind myself they don't have a crystal ball.

Not sure I can buy that anyone can identify a secular market (defined here: http://www.investopedia.com/terms/s/secularmarket.as ). Of course, we can all label periods that have past.

 

[audreyh1]

That's why I use qualifiers like "supposedly" and stick to my "all weather" investing strategy i.e. rebalance back to a fixed AA occasionally.

 

[rescueme]

I haven't seen that acronym used like that.

I had to figure it out, I'm guessing you meant "good for you"?

I've always seen it as "go * yourself"

Of course it's "good for you"?

I only curse at people IRL (and run real fast )...

 

[utrecht]

My total portfolio is 3.25X higher than it was in March '09. I'm still in accumulation mode and piling as much money in as I can, but it still amazes me that I have that much more in under 3 years.

 

[obgyn65]

I am also in the accumulation phase and I guess my portfolio is about twice as large as what it was in 2009.

My total portfolio is 3.25X higher than it was in March '09. I'm still in accumulation mode and piling as much money in as I can, but it still amazes me that I have that much more in under 3 years.