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MORE S&P 500 Index Stats

By JLP | April 6, 2007

At the suggestion of a couple of commenters on my S&P 500 Fun Facts post, I decided to rerun the numbers with inflation included. Here’s what I found along with a link to the source information:

NOTE: Although you should already know this, past performance is no guarantee of future performance.



Source Information: S&P 500 5-Year Rolling Period Returns (pdf)


Source Information: S&P 500 10-Year Rolling Period Returns (pdf)


Source Information: S&P 500 20-Year Rolling Period Returns (pdf)

Topics: Index Funds, Investing | 16 Comments »


16 Responses to “MORE S&P 500 Index Stats”

  1. Dave Says:
    April 6th, 2007 at 3:19 pm

    Very informative. It does appear that at least some of the 10-year and 20-year results are switched.

  2. MyOwnMillions Says:
    April 6th, 2007 at 3:26 pm

    This is exactly as it says, fun facts! For many of us, it is best buy a low cost index fund and stick with it through good and tough times (something that 401k plans are designed to do better than a brokerage account).

    My Own Millions Blog

  3. JLP Says:
    April 6th, 2007 at 3:27 pm

    Dave,

    You are correct – a result of my cutting and pasting. I have fixed the problem. Sorry about that.

  4. Bobby Says:
    April 6th, 2007 at 6:41 pm

    Actually the first two stats in the 10 year section show dates that span 20 years.

  5. lorax Says:
    April 6th, 2007 at 7:01 pm

    I don’t like to (still?) be a wet blanket, but a comparison to the 5 year t-bill is interesting. Obviously, the S&P 500 did better overall, but if you can see the year-to-year performance, there are some years you’d want to have treasuries. This all depends how much risk you can afford to take.

    One last thing… the S&P 500 had a great 10% long-term return due to (approximate and nominal) a 6% increase in earnings and a 4% yield. Let’s assume that we continue to have a 6% increase in earnings. (I hope that’s true, but I think it’s a tad high.) Yields are down to about 1.7% (according to Vanguard). So we can expect a (nominal) 7.7% long term return in the future.

    5 year treasuries return about 5%, risk free. So for large cap equities, we’re looking at 2.7% more return than a risk free investment. That’s a strange situation. It might mean that the market will correct so valuations bring yields back in line. Or it might be that prices won’t appreciate much. Or it could just mean that large cap risk is now considered lower so the return will be lower.

    This said, I do have large caps, but in a diversified portfolio.

  6. JLP Says:
    April 6th, 2007 at 10:20 pm

    Bobby,

    You’re right! That’s what I get for trying to hurry.

  7. AllFinancialMatters » Blog Archive » S&P 500 Fun Facts Says:
    April 7th, 2007 at 4:26 pm

    [...] FOLLOW-UP: More S&P 500 Stats Bookmark to:   [link] [...]

  8. links for 2007-04-08 ∞ Get Rich Slowly Says:
    April 8th, 2007 at 2:17 am

    [...] AllFinancialMatters » Blog Archive » MORE S&P 500 Index Stats JLP provides some tables that demonstrate the long-term value of stocks. They also show that stocks don’t *always* provide stellar returns. (tags: investing investments) [...]

  9. SteveK Says:
    April 8th, 2007 at 8:56 am

    Good stuff!

    Why wouldn’t the Average Real Return Since 1926 (=9.22%) be the same as the Average Annual Real Return since 1926 (=7.18%)? Can you explain why they are different?

  10. JLP Says:
    April 8th, 2007 at 9:21 am

    Steve K,

    The difference between the two numbers is that 9.22% is the average inflation-adjusted return, while 7.18% is the average ANNUAL inflation-adjusted return. In other words, 7.18% is the geometric average.

    Make sense? If not, let me know and I’ll write a post about the difference.

  11. » Weekly Blog Roundup, Easter Edition on Consumerism Commentary: A Personal Finance Blog Says:
    April 8th, 2007 at 12:01 pm

    [...] AllFinancialMatters shares some more statistics from S&P 500 returns. The best five year period for the S&P so far has been 1995 to 1999 with a 219.61% total return! [...]

  12. Personal Finance and Investing Blog » Blog Archive » Weekly Blog Roundup, Easter Edition Says:
    April 8th, 2007 at 1:25 pm

    [...] AllFinancialMatters shares some more statistics from S&P 500 returns. The best five year period for the S&P so far has been 1995 to 1999 with a 219.61% total return! [...]

  13. adistantsoil.com » Blog Archive » Investing Matters Says:
    April 9th, 2007 at 9:03 am

    [...] Some people are afraid of the stock market. We hear sad stories of people who have lost everything in bad deals. Investing in individual stocks is risky. Putting all your money in one place is just plain silly. That’s why mutual funds are a pretty safe investment, and the history of the stock market , even over the course of the depression, shows that the market pays. Here’s  a chart from All Financial Matters. Check out their site for more earnings and investment charts that illustrate how various areas of the stock market have risen and fallen over the years. [...]

  14. The best blog posts » Blog Archive » S&P 500 Index Stats: How would your money have done in an index fund Says:
    September 8th, 2007 at 2:16 pm

    [...] read more | digg story [...]

  15. Better than a Savings Bond: Give Stock For Christmas! » Money Forge » Blog Archive Says:
    December 6th, 2007 at 4:30 pm

    [...] Greater growth potential. Since 1926, the average total return for the S&P 500 in a 20 year period (the time it takes a bond to mature) is almost 406%, compared to 100% for a savings bond. (Source) [...]

  16. peter Says:
    September 7th, 2009 at 7:57 pm

    thanks for putting together all the statistics on the S+P 500. Clearly the inflation adjustment matters, and clearly the average annual return brings the nominal yield down even lower. Going forward the returns might be even lower because of a decrease in yields (comment by Lorax). What happens if you do the math and include 1)the costs of being in a mutual fund and 2)the taxes that you will have to pay when you actually try to get the money out of your 401 or IRA? this will bring the average annual return much lower, won’t it? thanks

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