It took almost 7 years to recover! SP500

[LeatherneckPA]

You were contributing to your TSP the whole time, right? That's why your portfolio is growing.

Alas, no, I was not contributing. The cost of maintaining two residences (one in PA for DW and one in NJ while I was promotion hunting) was too prohibitive. So I am afraid that is not the reason I have recovered.

 

[LeatherneckPA]

DNG here again. (Maybe I should change my screen name to DNG?) not being facetious here, just actually trying to understand this carzy little thing called money. Can you tell I've never given it much thought before?

Why do all the economics types always talk about 2007 dollars versus 2000 dollars versus 1950 dollars? I'm not in 2000 or 1950, I'm trapped here in 2007. And the dollars I am spending are 2007 dollars, for 2007 goods, at 2007 prices. Why is 1950 or 2000 even relevant?

 

[justin]

Alas, no, I was not contributing. The cost of maintaining two residences (one in PA for DW and one in NJ while I was promotion hunting) was too prohibitive. So I am afraid that is not the reason I have recovered.

Dang! Were you 100% SP500? If you had international or bonds, that would increase your returns. Reinvested dividends would help a little, since you would have been reinvesting in the 2002-2003 slump when your dividends were buying shares at prices 30-40% lower than today's SP500 price.

 

[justin]

Why do all the economics types always talk about 2007 dollars versus 2000 dollars versus 1950 dollars? I'm not in 2000 or 1950, I'm trapped here in 2007. And the dollars I am spending are 2007 dollars, for 2007 goods, at 2007 prices. Why is 1950 or 2000 even relevant?

Inflation. A 1950 dollar would buy you an average lunch at a restaurant today ($1 1950 = $8.17 in 2006).

When someone says they bought something back in 1950 for $10,000 (like a house), that sounds really cheap, although it is really equal to $82,000 of today's dollars.

 

[Nords]

Mark Hulbert's survey data claims that we're going to climb this wall of worry to new highs...

 

[Sam]

OK, DNG question here. (DNG = Dumb New Guy)

I don't understand how you can say it took seven years to recover? I had a little over $100K in my TSP before everything went south. I lost about $22K total. By the end of 2004 I was back up to $104K. Two years later, at the end of 2006, I was sitting at $150K. so my naive and simplistic look at the numbers tells me that I recovered everything I lost PLUS $50K in less than three years.

OK, putting my dunce cap on and getting up on my stool now. Tell me what I'm missing.

Definitely not a dumb question. I was just talking about the nominal index value, not even taking account of re-invested dividend.

You are not missing anything. I gave this thread a misleading tittle. My bad.

 

[Cut-Throat]

Definitely not a dumb question. I was just talking about the nominal index value, not even taking account of re-invested dividend.

You are not missing anything. I gave this thread a misleading tittle. My bad.

I wonder if this is the same type of logic that is used in the often stated:

"The stock market had no gains from 1966-1982"?

 

[al_bundy]

I wonder if this is the same type of logic that is used in the often stated:

"The stock market had no gains from 1966-1982"?

there is no way reinvesting dividends can come up with that much money. what was the yield of the sp500 in 2002? was it around 5%?

 

[wabmester]

I wonder if this is the same type of logic that is used in the often stated:

"The stock market had no gains from 1966-1982"?

Not sure what your point is, but that period did have nice dividends. And those dividends were eaten alive by inflation.

 

[LeatherneckPA]

Dang! Were you 100% SP500? If you had international or bonds, that would increase your returns. Reinvested dividends would help a little, since you would have been reinvesting in the 2002-2003 slump when your dividends were buying shares at prices 30-40% lower than today's SP500 price.

I was originally 100% C-fund (S&P), and in 2003 added some S-fund (Wilkshire 4500). didn't add I-fund (EAFE) until sometime in 2005. Was contributing my money buying at lows al of 2000 - 2003, stopped in mid-2004.

 

[LeatherneckPA]

there is no way reinvesting dividends can come up with that much money. what was the yield of the sp500 in 2002? was it around 5%?

don't know abaout the S&P, but my C-fund index (which supposedly tracks the S&P) lost money every year from 2001 thru 2003.

 

[ats5g]

there is no way reinvesting dividends can come up with that much money. what was the yield of the sp500 in 2002? was it around 5%?

It was around 2%.

fyi - from 4/1/2000 - 3/31/2007, the C fund [S&P 500 index] returned 0.88% per year nominal, and -1.71% per year after inflation.

You can get the monthly returns at www.tsp.gov. The yearly returns were:

2001 -11.95%
2002 -22.04%
2003 28.52%
2004 10.79%
2005 4.96%
2006 15.80%

- Alec

 

[haha]

He doesn't want to keep his clients up at night, he wants to scare you into becoming his client so you'll sleep better at night with his hedging strategy. I believe he pockets the full 1% ER on his funds, too. Nice work if you can get it. Of course, he could be right in spite of his conflict of interest.

I think Hussman is as close to an honest man that will be found in finance. And he is morally strong too. You know he is getting withdrawals and emails from disgruntled shareholders daily, because he is fully hedged and the pesky market just keeps going up.

I keep looking for him to make some sort of "midstream correction". That is what most people in his position wind up doing; but so far he has held steadfastly to his model. I am very impressed by his tenacity.

Ha

 

[wabmester]

I keep looking for him to make some sort of "midstream correction"; that is what most people in his position wind up doing. I am very impressed by his tenacity.

He has changed his tenor over time. He's much more into bearish prognosticating than he used to be. Did you read his latest commentary/interview? He basically sees himself as the lone voice of sanity. It's tough being a martyr.

His graph that I posted earlier is similar to Bogle's chart of "speculative yield." That speculative component has been a large and persistent component of returns for 20+ years now. It's hard to know when/if it'll go away.

 

[Sam]

Looks like we're going to break the high in 2000 today.

OK, so I was off by about a month But it's happening now. Let's see if it holds until the market closes.

 

[al_bundy]

so close