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We haven't set a nominal stock market record in 13 years...
Old 06-17-2013, 11:58 AM   #1
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We haven't set a nominal stock market record in 13 years...

For those who are "nervous" that we finally reached/passed the old market index record...
Quote:
For example, why is a record high in the United States stock market a reason for optimism? Nothing is remarkable about reaching a market record: the S.& P. Composite Index has done it 1,007 times, based on daily closes, since the beginning of 1928. Thatís about once every 23 trading days, on average, though the new records tend to come in bunches.

The important fact is that we havenít set a nominal stock-market record in six years. And we havenít set one in 13 years if we use the inflation-corrected S.& P. Composite total-return index. That this index may be about to set a record means only that we havenít made any real money in the stock market in 13 years, which hardly seems a reason for confidence.
http://www.nytimes.com/2013/03/10/bu...pagewanted=all
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Old 06-17-2013, 12:20 PM   #2
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Double bladed sword.
  • "Don't worry about retiring at the market high, because its really NOT a market high".
  • "The market hasn't made a dime in 13 years, but you're expecting it to return averages going forward ?"

And then we wonder why I'm destined to suffer OMY syndrome for awhile
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Old 06-17-2013, 09:17 PM   #3
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Much better to invest after 10 years of nothing than after 10 years of super growth.
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Old 06-18-2013, 08:04 AM   #4
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Originally Posted by Animorph View Post
Much better to invest after 10 years of nothing than after 10 years of super growth.
Yeah, I keep telling myself that also. Has there ever been a prior period of 13 years w/out nomial growth ?
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Old 06-18-2013, 09:49 AM   #5
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Originally Posted by Live And Learn View Post
Yeah, I keep telling myself that also. Has there ever been a prior period of 13 years w/out nomial growth ?
I kept hearing about how the 2000's were a "lost" decade, but sort of dismissed it because the spreadsheet that tracks my portfolio shows some pretty tremendous growth. Since I recovered from my divorce and got serious about investing again, about 47% of my nest egg is a result of appreciation, dividends, capital gains, etc. 53% of that was additional investments.

However, my spreadsheet spans from 3/5/98 to yesterday's close. So, that's a slightly wider span than simply the "2000's". If I just look at the period of 12/31/99 to 12/31/09, only 22.5% of my portfolio's increase was due to growth (dividends, appreciation, etc). 77.5% was because of additional money put in.

1998 and 1999 were good years for me, but I didn't have much money to invest back then, so I still missed out on that opportunity.

I lost a little bit of money in 2000, and a lot more in 2001 and 2002. I made money in 2003-2007, but 2008's loss canceled out all five of those years. So considering that I had lost money in '00-02, as of 2008 I was down for the decade. 2009 came roaring back, and got me into positive territory for the decade, at least.

I did well in 2010, lost about $600 in 2011, and did well in 2012. And so far this year. So, most of my "profit" has really only been in the past few years.
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Old 06-18-2013, 10:41 AM   #6
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Quote:
Originally Posted by Andre1969 View Post
I kept hearing about how the 2000's were a "lost" decade, but sort of dismissed it because the spreadsheet that tracks my portfolio shows some pretty tremendous growth. Since I recovered from my divorce and got serious about investing again, about 47% of my nest egg is a result of appreciation, dividends, capital gains, etc. 53% of that was additional investments.

However, my spreadsheet spans from 3/5/98 to yesterday's close. So, that's a slightly wider span than simply the "2000's". If I just look at the period of 12/31/99 to 12/31/09, only 22.5% of my portfolio's increase was due to growth (dividends, appreciation, etc). 77.5% was because of additional money put in.

1998 and 1999 were good years for me, but I didn't have much money to invest back then, so I still missed out on that opportunity.

I lost a little bit of money in 2000, and a lot more in 2001 and 2002. I made money in 2003-2007, but 2008's loss canceled out all five of those years. So considering that I had lost money in '00-02, as of 2008 I was down for the decade. 2009 came roaring back, and got me into positive territory for the decade, at least.

I did well in 2010, lost about $600 in 2011, and did well in 2012. And so far this year. So, most of my "profit" has really only been in the past few years.
You're both right. One can pick a 10 year period to "prove" whatever they'd like...FWIW

YearTot Ann Return incl Div10 Yr Ann Return
199921.04%18.21%
2000−9.10%17.46%
2001−11.89%12.94%
2002−22.10%9.34%
200328.68%11.07%
200410.88%12.07%
20054.91%9.07%
200615.79%8.42%
20075.49%5.91%
2008−37.00%−1.38%
200926.46%−0.95%
201015.06%1.41%
20112.11%2.92%
201216.00%7.10%
High37.58%19.21%
Low−37.00%−1.38%
CAGR9.94%
Median15.06%13.38%
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Old 06-18-2013, 06:46 PM   #7
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There are indeed many time periods one could consider and get investment returns all over the place depending on the period chosen. For myself however, there is one time period that is most significant: 1/1/2003 to present. Why? I Er'd on 12/31/2002. My return since then (thru today per Quicken) is 8.25% annually. Since I depended entirely on my investment assets until I started collecting SS last year its gratifying that this horrible (according to some) decade resulted in positive returns not too different from long term averages.
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