papadad111
Thinks s/he gets paid by the post
- Joined
- Oct 4, 2007
- Messages
- 1,135
Even if the indices are flat, if the market has a 2% dividend yield it's beaten the pants out of being in cash.
+1. Yep.
Over the course of the last approx two years, mr market is up total of 2% in cap gains and 5% on dividends offset by around 4% inflation erosion. ... Net a 3% total gain or around 1.5% per year. Not stellar, but better than going in reverse... Which is what cash does.
And agree Gone4Good reference the international equities component being in reverse to the tune of around 5% real loss per year for the same period. (My intl fund for same period shows 9% loss, 5% dividend gains, 4% inflation).
W2R. Generally when looking at equities, I like to focus on the SP500 or Russell 2000 versus the Dow, (( Is a better cross section of stocks)).
The flat picture is really visible when viewing a 5 year of those broader indices as others have posted. Perhaps also visible on the DOW, but maybe not as pronounced. You're right that the volatility /VIX has been relatively calmer. For the SP500, over the past two years mr market has really been in the 1850-2150 range, <10% up or down which is considered low volatility.
NWB - yep. Sometimes timing the market can be profitable. For me, it's usually no better than B&H...
Senator - good points about a 20 year period of Japan style flat....
So.. we all sure hope for better alpha, but if not, we'll all be soon reconsidering our safe WR and wishing we had multiple streams of income to augment 2.5% dividends (in another year or two) if the flatness persists.
The market has been flat for extended periods before ... Perhaps good for accumulators. Less good for new retirees as this plays to SOR risk. I'll do a little digging to see how those flat periods ended.
Bull markets do tend to end in a fizzle... Or a whimper as it's often called. Perhaps this is what we are getting. That fizzle-out of this past 7 year bull...