By JLP | December 21, 2009
As it stands at the writing of this post, the S&P 500 Index returned -9.16 over this past decade (January 2000 – December 21, 2009). Here are a few interesting tidbits I gathered from the data:
• Of the 120 months of this past decade, 50 of them had negative returns.
• Of the 50 months with negative returns, the worst was October 2008′s -16.8%.
• The average monthly return over the decade was .03% (highly misleading–see the next point).
• The geometric average monthly return over the decade was -.08%.
• Of the 70 months with positive returns, the best was March 2000′s 9.78%.
• $10,000 invested on December 31, 1999, would be worth $9,083 at the time of this writing (hypothetical…does not include fees).
• The peak value of that $10,000 investment would have occurred in October 2007 at $11,992.
• Dollar-cost-averaging $83.33 per month ($10,000 total) over the decade would be worth $10,689 at the time of this writing (again, hypothetical as it does not include fees).
Even as bad as the past decade has been, it’s hard to be optimistic about the coming decade due to valuations. The S&P 500 Index currently has a P/E ratio of 85.93 and a dividend yield of 1.98%—not exactly bargain territory. Our only hope is that corporate earnings pick up and pick up fast.