Looking at 10, 20, and 30-Year Rolling Total Returns for the S&P 500 Index

This is part 2 of my series on the S&P 500 Index. Today’s graphics show the rolling TOTAL RETURNS for 10, 20, and 30-years. I found these particular charts interesting to look at (maybe it’s my snazzy color choice?). The dates you see at the bottom of each chart, marks the end of the time period.

The 10-year chart is interesting in that the last time we had a negative performance over a 10-year period was all the way back at the end of the 1930s and into the 1940s. It would be interesting to see how national debt as a percentage of GDP matches up between the two eras. I’ll have to see what I can come up with on that.

As you can see from the other two charts, the total returns can vary dramatically but seem to follow a pattern. Once again, this time seems different in that we seem to have a lot more debt going forward than we did in times past.

Here’s to hoping that we aren’t in a prolonged slump.


Next up in this series will be these same numbers minus inflation…

2 thoughts on “Looking at 10, 20, and 30-Year Rolling Total Returns for the S&P 500 Index”

  1. Have you heard of ‘Shadow Stats’ by Walter ‘John’ Williams (easy to google). He tracks how inflation is seriously under-reported today (by the gov), by comparing what our inflation numbers would be if the feds continued to use the older inflation formulas from 1980 and/or 1990.

    If we used the formulas from 1980 we’d be at around an 8% inflation rate today (compared to around the 1-2% reported by the fed today).

    The calculations have been modified to replace a basket of goods that included a T-Bone steak meal in 1980 with the equivalent of hamburger helper in 2010 (as an example of how Boskin/Greenspan started jacking with the inflation calculation formulas).

    Inflation is the ‘hidden-tax’ that we all pay to Uncle Sam, and so it is in their interest to under-report that number as much as possible.

    It might be better to pick something else (other than the government reported inflation numbers) that is somewhat immune from inflation and use that to see the stock returns over time, like ounces of Gold or other metal/commodities, loafs of bread, gallons of milk, pounds of beef, average household income, etc.

    Something to think about anyhow.

  2. The first two (10 and 20 year periods) seem to show two very large (20 to 25 year) cycles. Perhaps we now move into a 10-year period when the rolling return moves up? And maybe this is inevitable following the events of late 2008.

    I am a little afraid that I am over-interpreting because the charts may actually be dominated by a small number of very large events and the pattern is an artifact of averaging these with the rest of the years. For example, the late 1930s show a negative 10-year return because they are catching the peak about 10 years earlier. Similarly we see a low 10-year return in 2009/2010, not because 2009 was so bad but because 1999 was so good.

    On the other hand, the nice spike in the late 1950s reflects the post-war boom – a real longer-term process.

    I’m also curious about your comment that “this time seems different”. That’s what the comentators said about the dot-com and housing booms (why they would never end). I hope you don’t become one of those infamous contrarian indicators 🙂

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