What were the historical bad years

[modhatter]

Reading Ray Lucia's latest book he makes mention of a very bad 16 year run of flat returns from 1966 to 1982, but when I look at numbers on Fire Calc, I don't see that reflected so much.

What were are worst historical runs?

 

[teejayevans]

The dow was basically flat for that period, not counting dividends,
or inflation, with inflation who knows?

Anybody know a way of plots stocks/indexes adjusted for inflation??

TJ

 

[Bikerdude]

The dow was basically flat for that period, not counting dividends,
or inflation, with inflation who knows?

Anybody know a way of plots stocks/indexes adjusted for inflation??

TJ

I remember 5 yr. CD rates of 16%. I even think the 30 yr. treasury hit 16%. That should give you a hint of what inflation was like in the 70's. Hard to make money with a flat return in stocks.

 

[brewer12345]

1966 to 1982 was a worse period for SWR portfolio survival than the Great Depression. The combination of high inflation and low returns was a killer. However, if you had held commodities as part of your portfolio, it would have been less painful.

 

[OAG]

1974-1982 was probably the worst period for inflation since 1923 to date. See this link Federal Reserve Bank of Minneapolis - Consumer Price Index and Inflation Rates, 1913-.

 

[ats5g]

See also, William Bernstein's:

The Retirement Calculator from Hell

fyi, here are the annual real returns of the stock market from 1927-2006:

1927 35.60
1928 41.37
1929 -14.64
1930 -27.09
1931 -38.87
1932 1.60
1933 65.99
1934 1.14
1935 41.72
1936 30.20
1937 -36.88
1938 30.86
1939 3.57
1940 -8.09
1941 -13.93
1942 4.87
1943 20.65
1944 19.33
1945 35.35
1946 -13.12
1947 -9.62
1948 -5.34
1949 21.49
1950 28.35
1951 11.98
1952 11.18
1953 -0.44
1954 49.23
1955 25.81
1956 6.88
1957 -13.23
1958 40.89
1959 11.82
1960 -0.53
1961 25.68
1962 -11.21
1963 19.33
1964 14.82
1965 12.59
1966 -11.26
1967 24.70
1968 9.57
1969 -15.49
1970 -5.32
1971 11.30
1972 13.70
1973 -23.51
1974 -35.08
1975 25.90
1976 19.81
1977 -8.89
1978 0.88
1979 11.78
1980 17.38
1981 -12.95
1982 13.39
1983 18.85
1984 -1.09
1985 26.84
1986 13.41
1987 -1.72
1988 12.93
1989 22.56
1990 -10.89
1991 28.26
1992 5.88
1993 8.34
1994 -3.27
1995 31.97
1996 17.75
1997 27.40
1998 20.35
1999 22.56
2000 -13.97
2001 -13.69
2002 -22.09
2003 30.15
2004 10.04
2005 3.80
2006 12.62

from 1/1/1962 - 12/31/1982, the annualized real return was -0.07%.

- Alec

 

[lem1955]

I remember 5 yr. CD rates of 16%. I even think the 30 yr. treasury hit 16%. That should give you a hint of what inflation was like in the 70's. Hard to make money with a flat return in stocks.

My first mortgage, taken in 1979, was at 14.25%. I had no clue.

 

[Lazarus]

I had a 12% mortgage in 1980! Seems pretty painful now.

 

[rmark]

From “Triumph of the Optimists” 1900 - 2000
Real, Annual stock bond (1 – 11% long term inflation)
geo sd geo sd
Australia 7.5 17.7 1.1 13.0
Belgium 2.5 22.8 -0.4 12.1
Canada 6.4 16.8 1.8 10.6
Denmark 4.6 20.1 2.5 12.5
France 3.8 23.1 -1.0 14.4
Germany 3.6 32.2 -2.2 15.9 (ex–weimar)
Ireland 4.8 22.2 1.5 12.3
Italy 2.7 29.4 -2.2 14.4
Japan 4.5 30.3 -1.6 20.9
Netherlands 5.8 21.0 1.1 9.4
South Africa 6.8 22.8 1.4 10.6
Spain 3.6 22.0 1.2 12.0
Sweden 7.6 22.8 2.4 12.7
Switzerland 5.0 20.4 2.8 8.0
UK 5.8 20.0 1.3 14.5
US 6.7 20.2 1.6 10.0 < 4% of initial + annual inflation from this
World 5.8 17.0 1.2 10.3

Pretty much anywhere outside the U.S. was worse.