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?
EZ money on Wall St
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pb4uski
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+1
steelyman
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My retirement fund spreadsheet assumes 6% annual return (nominal).
GravitySucks
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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.
Seriously, I'll be ecstatic if we get 3% real over the next 10 years if its nice and smooth.
steelyman
Moderator Emeritus
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Goes to show that many people have no idea.
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.
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.
-ERD50
GravitySucks
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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.
jollystomper
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audreyh1
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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.
You get vastly different statistics depending on where you start measuring.
COcheesehead
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I will be happy to just outpace inflation.
ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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%).
-ERD50
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In that case, sell all your equities and buy TIPS.
I don't understand the concept of TIPS. I understand that there is no free lunch in finance. So why would TIPS pay you more than inflation? What is the downside?
COcheesehead
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Their yield is horrible and I can think of a dozen better ways to outpace inflation.
DEC-1982
Full time employment: Posting here.
Looking at a 40 year period (my target period), I expect returns of around 10% over that period. It was low in 2009 and high now, but over the next 40 years it should be (hopefully) be the same as the average over the last approximately 100 years.
FWIW, the link below says S&P index returned 12.25% since 1923 (till 2016). I am careful to not say S&P 500, since that was introduced in 1957.
"The current average annual return from 1923 (the year of the S&P’s inception) through 2016 is 12.25%.(1,2) That’s a long look back, and most people aren’t interested in what happened in the market 80 years ago."
https://www.daveramsey.com/blog/the-12-reality
FWIW, the link below says S&P index returned 12.25% since 1923 (till 2016). I am careful to not say S&P 500, since that was introduced in 1957.
"The current average annual return from 1923 (the year of the S&P’s inception) through 2016 is 12.25%.(1,2) That’s a long look back, and most people aren’t interested in what happened in the market 80 years ago."
https://www.daveramsey.com/blog/the-12-reality
