100% Stocks?

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kathyauburn
Posts: 192
Joined: Thu May 07, 2015 12:25 pm

100% Stocks?

Post by kathyauburn » Sat Oct 21, 2017 12:12 pm

Like a wild ride?

Plug these annual S&P 500 returns (1928-2016) into your spreadsheet and see how much fun you can have:

43.81%
-8.30%
-25.12%
-43.84%
-8.64%
49.98%
-1.19%
46.74%
31.94%
-35.34%
29.28%
-1.10%
-10.67%
-12.77%
19.17%
25.06%
19.03%
35.82%
-8.43%
5.20%
5.70%
18.30%
30.81%
23.68%
18.15%
-1.21%
52.56%
32.60%
7.44%
-10.46%
43.72%
12.06%
0.34%
26.64%
-8.81%
22.61%
16.42%
12.40%
-9.97%
23.80%
10.81%
-8.24%
3.56%
14.22%
18.76%
-14.31%
-25.90%
37.00%
23.83%
-6.98%
6.51%
18.52%
31.74%
-4.70%
20.42%
22.34%
6.15%
31.24%
18.49%
5.81%
16.54%
31.48%
-3.06%
30.23%
7.49%
9.97%
1.33%
37.20%
22.68%
33.10%
28.34%
20.89%
-9.03%
-11.85%
-21.97%
28.36%
10.74%
4.83%
15.61%
5.48%
-36.55%
25.94%
14.82%
2.10%
15.89%
32.15%
13.52%
1.36%
11.74%

http://pages.stern.nyu.edu/~adamodar/Ne ... retSP.html

Ron Scott
Posts: 975
Joined: Tue Apr 05, 2016 5:38 am

Re: 100% Stocks?

Post by Ron Scott » Sun Oct 22, 2017 9:53 am

Predicting the future is impossible and past performance is not a good indicator of future returns.
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. Preparing for financial challenges is more fruitful than trying to predict them.

magneto
Posts: 951
Joined: Sun Dec 19, 2010 10:57 am
Location: On Chesil Beach

Re: 100% Stocks?

Post by magneto » Sun Oct 22, 2017 10:05 am

For those who have been fortunate to accumulate wealth and with an interest in financial history,
Benjamin Roth's 'The Great Depression - A Diary' may be a sobering read.

And as Cassandra keeps reminding me, by some measures Stocks today are more expensive than they were in 1929.
'There is a tide in the affairs of men ...', Brutus (Market Timer)

lws6772
Posts: 455
Joined: Mon Oct 06, 2008 5:14 pm
Location: Texas

Re: 100% Stocks?

Post by lws6772 » Sun Oct 22, 2017 10:16 am

"Markets move when other investors believe they know what other investors are thinking" - Robert J. Shiller - Nobel Memorial Prize in Economic Sciences 2013.

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Oicuryy
Posts: 1246
Joined: Thu Feb 22, 2007 10:29 pm

Re: 100% Stocks?

Post by Oicuryy » Sun Oct 22, 2017 10:27 am

From Damodaran's data.

Image

Ron
Money is fungible | Abbreviations and Acronyms

magneto
Posts: 951
Joined: Sun Dec 19, 2010 10:57 am
Location: On Chesil Beach

Re: 100% Stocks?

Post by magneto » Sun Oct 22, 2017 10:35 am

Oicuryy wrote:
Sun Oct 22, 2017 10:27 am
From Damodaran's data.

Image

Ron
Brilliant those semi-log charts!
Makes 80% life-changing drawdown a mere wriggle!
'For what do we live, but to make sport for our neighbors, and laugh at them in our turn?' :happy

Thanks
Last edited by magneto on Sun Oct 22, 2017 10:38 am, edited 1 time in total.
'There is a tide in the affairs of men ...', Brutus (Market Timer)

McGilicutty
Posts: 155
Joined: Tue Dec 13, 2016 5:24 pm

Re: 100% Stocks?

Post by McGilicutty » Sun Oct 22, 2017 10:38 am

Dang, T.bonds were killing stocks from the late 1920's to about the mid 1940's. I wonder what investors were saying on message boards back then. The bond investors were probably making fun of the stock investors wondering how they could be so foolish.

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nedsaid
Posts: 10334
Joined: Fri Nov 23, 2012 12:33 pm

Re: 100% Stocks?

Post by nedsaid » Sun Oct 22, 2017 10:40 am

magneto wrote:
Sun Oct 22, 2017 10:05 am
For those who have been fortunate to accumulate wealth and with an interest in financial history,
Benjamin Roth's 'The Great Depression - A Diary' may be a sobering read.

And as Cassandra keeps reminding me, by some measures Stocks today are more expensive than they were in 1929.
Well no. The shoe shine boys aren't giving out stock tips to Bernard Baruch. I don't see ordinary folks quitting their jobs and taking up day trading. We aren't seeing the speculative excesses we saw in 1929, 1968, 2000. Also remember that accounting standards have changed and the definition of earnings has become more conservative. So you might say that the measuring rod has changed.

But by no means would I say stocks are cheap here, they are not. If you haven't rebalanced your portfolio, now is a good time. If you are concerned about valuations, nothing wrong with trimming back. This is not a "sell" signal on the market but just remember that stocks are always risky.
A fool and his money are good for business.

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