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S&P 30 year performance
Old 07-22-2008, 11:30 AM   #1
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S&P 30 year performance

I read in a book recently by Bogle (The Little Book of Common Sense Investing Page 32) that someone who invested $15,000 in the S&P 500 Index in 1976 would have had $461,777 in 2006 (assuming all dividends/distributions were reinvested over that 30 yr period). Any validity to this statement. If so, why is there such angst by some pundits against investing in the 500 index particularly if in a low cost company like Vanguard or Fidelity.
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Old 07-22-2008, 11:33 AM   #2
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I read in a book recently by Bogle (The Little Book of Common Sense Investing Page 32) that someone who invested $15,000 in the S&P 500 Index in 1976 would have had $461,777 in 2006 (assuming all dividends/distributions were reinvested over that 30 yr period). Any validity to this statement. If so, why is there such angst by some pundits against investing in the 500 index particularly if in a low cost company like Vanguard or Fidelity.
Because they are biased toward more recent results and some pundits want you to use managed funds and/or money managers to fatten their coffers. They remember the 2000-2008 period as a period of a slightly negative real return from the S&P 500 and tend to emphasize that while ignoring the ridiculous returns from 1982-1999. But it's always easy to cherrypick results to present either the bearish case or the bullish case.
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Old 07-22-2008, 11:41 AM   #3
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what would have been the return if you invested in 1968?

#1 reason to not believe everything you read in the media is that a lot of journalists are liars. they need sources for stories and in exchange they are expected to write some things. bad business for their sources if people don't use managed funds and invest with index funds
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Old 07-22-2008, 01:18 PM   #4
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Originally Posted by ferco View Post
I read in a book recently by Bogle (The Little Book of Common Sense Investing Page 32) that someone who invested $15,000 in the S&P 500 Index in 1976 would have had $461,777 in 2006 (assuming all dividends/distributions were reinvested over that 30 yr period). Any validity to this statement. If so, why is there such angst by some pundits against investing in the 500 index particularly if in a low cost company like Vanguard or Fidelity.
Tooo - lazy to run the numbers but I put in roughly 73k 1976 to 1992 in dribs and drabs - ? 830k around 2006 - unfortunately did a few asset mix changes and took some money out(not much cause I'm cheap after 2002).

The short term angst - we have a tendency to er 'haaarumph! Recency!'

Paint drying and grass growing over long periods of time does not pass the -publish or perish, sky is falling, I want your attention requirement.

Successful investing is so stone simple nobody would believe you if you told them.

Ya gotta make it complicated like Pssst - Wellesley to even get their attention.

heh heh heh - besides what would we B.S. about then. .
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Old 07-22-2008, 01:22 PM   #5
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what would have been the return if you invested in 1968?

#1 reason to not believe everything you read in the media is that a lot of journalists are liars. they need sources for stories and in exchange they are expected to write some things. bad business for their sources if people don't use managed funds and invest with index funds
Greed and fear get attention. Getting attention gets advertisers.

There's a reason why they pump irrational exuberance when the markets and economy are seemingly strong, and why they pump tinfoil when they're not.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
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Old 07-22-2008, 01:44 PM   #6
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Because they are biased toward more recent results and some pundits want you to use managed funds and/or money managers to fatten their coffers. They remember the 2000-2008 period as a period of a slightly negative real return from the S&P 500 and tend to emphasize that while ignoring the ridiculous returns from 1982-1999. But it's always easy to cherrypick results to present either the bearish case or the bullish case.
I ran results for AIVSX (American Funds Investment Company of America):

1/1/76 - 6/30/08: $775,115 with reinvested dividends and capital gains.

6/30/68-6/30/08: $971,474 with reinvested dividends and capital gains.

I realize that this fund is NOT a large cap blend like the S&P, but the fund has been around since 1934 so I can look at a 74 year history. Upfront LOAD is included in the numbers above..........
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