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2008 vs. History
By JLP | July 1, 2008
I know you’re probably getting tired of looking at this stuff but I thought these two graphics I put together are interesting.
The first one is a bar chart comparison of this year’s monthly total returns for the S&P 500 Index vs. the long-term average for that month. As you can see, it hasn’t been a very good year so far. June really stunk it up.
The second graphic is the actual numbers from the first graphic but displayed in an easy-to-read format (for all you market junkies).
It’s tough to say what lies ahead for the rest of 2008. All I can say is the first half was a blood bath, especially for the financial sector.
Topics: Investing |
July 1st, 2008 at 5:49 pm
WOW!! I didn’t realize how bad June really was. I didn’t know it was the worst month of the year. Now that makes me a little scared to run my own numbers. Thanks for the charts. Also, where did you find these figures?
July 1st, 2008 at 6:15 pm
I ran my own numbers, and it was a tad funny. Over the past four years plus (since February, 2004, to be exact), I have actually done better in my money market (VMMXX) and laddered CDs (averaging around 5.75%) than in my balanced Vanguard funds (historically 60% stocks/40% bonds, with 20% of those stocks in international stuff).
As they say, stuff reverts to the mean. The over 5% return on my cash investments has buffered the sub-par return on my other investments.
It pays to be diversified.
Yours,
Bozo
July 2nd, 2008 at 1:49 am
But then again…it depends on how you look at it. Given that I’ve still got a few decades until retirement (as do most of us here), I choose to look at this period as a sale, and a good time for stocking up on discount longterm positions.
I think we need to quit listening to so much of the doomsday hype and noise out there. It’s truly overwhelming. Yes, I suppose in a way I am advocating a bunker mentality. But at age 46, I’ve weathered my share of storms and though this one promises to last longer than we’d all like - we WILL get through it and come out of this tunnel.
Eliminate or at least minimize your debt, and keep socking away for the future.
July 3rd, 2008 at 2:17 pm
DJD, I couldn’t agree more. As I’ve noted more than once on another forum, this latest market swoon is just noise. If you’re properly diversified, it’s all just pixels on a screen. Even if you are retired (as I am), you have to have a perspective longer than a week, month, year (or even a decade). Heck, I’ve seen a lot of ups and downs (I’m 61). My savings philosophy was always guided by the squirrels in our oak tree. They buried lots, and lots, of acorns when the oak tree produced them. [They tore up our back yard in the process, but that's another story] Then, when times got tough (for the squirrels, at least), they had those acorns to dig up [again tearing up our back yard]. The squirrels got fat, multiplied, and made many small squirrels.
Then, the foxes came down from the open space near our house (we are fortunate to live near a wildlife preserve) and began to munch on the squirrels. Now, the foxes, squirrels, and our back yard are in balance. Everything reverts to the mean. Everything.
Yours,
Bozo