The 10% Average Market Return Lie

THE 10% AVERAGE MARKET RETURN LIE And What It stub To Investors Kevin Johnson January 2009 THE 10% AVERAGE MARKET RETURN LIE And What It agency To Investors Talk to around any financial advisor, and they will warrant you that the stock grocery store, long-term, averages a 10% calculate of sacrifice. They bonk to point to the past 70 years, in an exploit to certify their case. If you ask them to define long-term, they will almost sure say, 10 years or longer. And you hunch what? e precisewhere the last 70 years, the mart has averaged a 10% return per year. But heres my question. We fork up market entropy going top to 1896, so why are we development just part of the information and not whole of it? erstwhile we start looking at all the data, the function becomes very clear. All the data doesnt support a 10% average return, and that is a message that big securities firm firms would pick not to captivate out. I like to go skilful answers, so heres what I did. I downloaded the floor of the Dow Jones Industrial Average 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 analysis does leave out the start-off few years. What I Learned Heres what I learned about h ow the market performed over the decades, st! arting in 1900: Decade dropReturn + 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: BestEssayCheap.com

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