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Email this4:41 pm
April 27, 2017
Online
Freedom said
I do not know if it is half the time, but bonds do beat equities some of the time. After the Great Depression, I don't believe the Dow Jones Industrial Average was even back to even until 1972, on a price-only, inflation-adjusted basis.
Why make up obviously false claims? Whats the purpose?
Accounting for inflation Dow beat pre-depression 1929 peak in 1959. One would have had to be seriously unlucky to invest everything on the day of pre-depression peak. But thats not the real story. Dow does not reflect dividends. With dividends reinvested, the terribly unlucky hypothetical investor who put everything into the market at the pre-depression peak would have got his money back decades before 1959. And Dow is a bad measure of the market; today you can get far more diversification in a nanosecond.
5:10 pm
April 6, 2013
Offline
Why make up obviously false claims? To justify poor investment decisions.
As well, no-one invests like the Dow Jones Industrial Average. It is a junk average that changes the weights of each stock after one of the stocks splits and discards dividends. No-one manages a portfolio like that.
I looked into this before. S&P 500 recovered from the 1929 crash by end of 1936:
Bill said
Not sure where the 10 years comes from, maybe there's research underpinning that. The US stock market peaked in 1929 and didn't get back to that level until about 1954 so for 25 years 100% fixed income would have been better. …Yes, I presented the research years ago.
It is also not true that it took 25 years to recover from 1929. The investor would have recovered around end of 1936.
According to NYU: Historical Returns…, $100 invested in S&P 500 at the start of 1928 grew to $143.81 at the start of 1929. That $143.81 recovered and became $145.38 by the end of 1936.
By end of 1954, that $145.38 at the start of 1929 became $783.18, far from just breaking even.
