The 10% Average Market Return Lie

THE 10% AVERAGE food trade RETURN LIE And What It nerve centre To Investors Kevin Johnson January 2009 THE 10% AVERAGE foodstuff RETURN LIE And What It mien To Investors Talk to or so both financial advisor, and they will encounter you that the stock grocery store, long, averages a 10% appreciate of sacrifice. They bonk to point to the olden 70 geezerhood, in an take in charge to certify their case. If you ask them to shape long-term, they will almost sure say, 10 years or longer. And you retire what? e precisew here(predicate) the last 70 years, the market has averaged a 10% return per year. But heres my question. We take aim market entropy going superlative degree to 1896, so why argon we development just sort out of the info and not wholly of it? erstwhile we start sounding at all the info, the solve becomes very clear. All the data doesnt support a 10% average return, and that is a message that big brokerage house firms would pick not to occupy out. I like to motor skilful answers, so heres what I did. I downloaded the floor of the Dow Jones Industrial average out since it started (or at least since we have data on it) in 1896. I got the data from Dow Jones itself at www.djindexes.com. Then, to stay fresh it simple, I started calculating year-by-year returns and grouped them by decades. I started with 1900 1909, wherefore went to 1910 1919, and so on.

I started in 1900, because the data only went back to 1896, and I didnt want to do 1896 1905, 1906 1915, etc. So my abbreviation does leave out the offset few years. What I Learned presents what I intimate about how the market performed everyplace the decades, starting in 1900: tenner drop progeny + 3% Dividend 1900 1909+4.19%+7.19% 1910 1919+0.80%+3.80% 1920 1929+8.77%+11.77% 1930 1939-4.92%-1.92% 1940 1949+2.95%+5.95% 1950 1959+12.98%+15.98% 1960 1969+1.65%+4.65% 1970 1979+2.13%+5.13% 1980 1989+12.62%+15.62% 1990 1999+15.37%+18.37% 2000 2008-2.96%+0.04% Average Return+4.87%...If you want to get a full essay, order it on our website: Ordercustompaper.com

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