Why has the S&P500 gone up so much since 2009?

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Tigermoose
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Why has the S&P500 gone up so much since 2009?

Post by Tigermoose » Tue Mar 26, 2019 12:29 pm

^GSPC Interactive Stock Chart | S&P 500 Stock - Yahoo Finance

What's your take?

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HomerJ
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Re: Why has the S&P500 gone up so much since 2009?

Post by HomerJ » Tue Mar 26, 2019 12:32 pm

Human labor and capital is turned into profits?

Same reason the stock market has gone up for the past 150 years?

Nothing that special about 2009-2019. There have been 10-year periods like it in the past.
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ResearchMed
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Re: Why has the S&P500 gone up so much since 2009?

Post by ResearchMed » Tue Mar 26, 2019 12:38 pm

Tigermoose wrote:
Tue Mar 26, 2019 12:29 pm
https://finance.yahoo.com/chart/%5EGSPC ... 1dfQ%3D%3D

What's your take?
What is with the teensy-weensy type?
I'm not going to click on a link that I cannot even read, and also without some commentary to explain the linked content.

RM
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randomguy
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Re: Why has the S&P500 gone up so much since 2009?

Post by randomguy » Tue Mar 26, 2019 12:39 pm

Because it went down so much in 2008😁. Start looking at 15-30 year periods and returns are right in line with historical averages. People seem to forget that to average 10%, the good periods have to be above that to make up for the bad periods below it.

Now what the average going forward will be is a far different question.

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Re: Why has the S&P500 gone up so much since 2009?

Post by Jim180 » Tue Mar 26, 2019 12:40 pm

Good corporate earnings in a low inflation, low interest rate environment.

pward
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Re: Why has the S&P500 gone up so much since 2009?

Post by pward » Tue Mar 26, 2019 12:45 pm

2 words: The Fed

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Re: Why has the S&P500 gone up so much since 2009?

Post by Godot » Tue Mar 26, 2019 12:45 pm

Cheap dough.
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nisiprius
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Re: Why has the S&P500 gone up so much since 2009?

Post by nisiprius » Tue Mar 26, 2019 12:54 pm

"Who can explain it? Who can tell you why?
Fools give you reasons, wise men never try."
--Oscar Hammerstein, "Some Enchanted Evening"
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

LiterallyIronic
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Re: Why has the S&P500 gone up so much since 2009?

Post by LiterallyIronic » Tue Mar 26, 2019 12:58 pm

Tigermoose wrote:
Tue Mar 26, 2019 12:29 pm
What's your take?
Because I was unable to invest anything from 2009 to 2012 and barely able to invest a few thousand per year between 2013 and 2016. Now that I'm able to invest a high percentage of my income, the stock market will stay relatively flat until I retire. At that point, it will immediately crash and stay down until I'm dead, when it will proceed to shoot back up again.

Boglegrappler
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Re: Why has the S&P500 gone up so much since 2009?

Post by Boglegrappler » Tue Mar 26, 2019 1:02 pm

Earnings of the S&P are up 20+% since 2008.

The ten year treasury rate is down from 4-5% just prior to 2008, to about 2.4% today. Its been as low as 1.6% in the past couple of years.

Put those two facts together, and you can see why the market should be higher compared to 2008, not to mention the "crash" lows of early 2009.

You could make a case that with rates about half what they were in 2008, and earnings 20% higher, that the market ought to be even higher today than it is. The major differentiating factor there would be differences in the anticipated economic growth rate.

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Re: Why has the S&P500 gone up so much since 2009?

Post by cashmoney » Tue Mar 26, 2019 1:41 pm

Tigermoose wrote:
Tue Mar 26, 2019 12:29 pm
https://finance.yahoo.com/chart/%5EGSPC ... 1dfQ%3D%3D

What's your take?


Increased productivity- the same reason why it will continue to go up in the long run.

DonIce
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Re: Why has the S&P500 gone up so much since 2009?

Post by DonIce » Tue Mar 26, 2019 1:46 pm

Tigermoose wrote:
Tue Mar 26, 2019 12:29 pm
Why has the S&P500 gone up so much since 2009?
Because that's what stock markets do in most periods, they go up. Punctuated by the occasional crash. If you're asking why do stock markets in general go up, it's because humans build things more than they destroy them and they innovate and create new technologies.

Starting in 2009 gives you a biased result (14% per year) because you are starting right from the bottom of one of the deepest crashes.

Start at the 2007 peak instead and you get a much more modest rate of growth (7.8%).

Start in 2000 and you get an even more modest rate of 5.3% over the last 2 decades.

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Re: Why has the S&P500 gone up so much since 2009?

Post by Glockenspiel » Tue Mar 26, 2019 2:00 pm

Tigermoose wrote:
Tue Mar 26, 2019 12:29 pm
https://finance.yahoo.com/chart/%5EGSPC ... 1dfQ%3D%3D

What's your take?
Because CEOs ask/convince workers to produce more and more while paying them less and less.

Trader Joe
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Re: Why has the S&P500 gone up so much since 2009?

Post by Trader Joe » Tue Mar 26, 2019 2:03 pm

Because the S&P 500 is the cream of the crop in the greatest country on the planet.

james22
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Re: Why has the S&P500 gone up so much since 2009?

Post by james22 » Tue Mar 26, 2019 2:08 pm

LOL
pward wrote:
Tue Mar 26, 2019 12:45 pm
2 words: The Fed
Any answer other than this is delusional.
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GCD
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Re: Why has the S&P500 gone up so much since 2009?

Post by GCD » Tue Mar 26, 2019 2:09 pm

It's a plot by the 1% to widen the wealth gap.

MnD
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Re: Why has the S&P500 gone up so much since 2009?

Post by MnD » Tue Mar 26, 2019 2:35 pm

The business cycle.
20-year returns since March 26, 1999 which include equity moves attributable to the tail end of the .com boom, two recession/crashes and two recoveries and are very ordinary compared to long-term averages. Below average actually at 6.54% before inflation for US Total Stock Market last 20 years. People that get all excited about the last 10 year returns aren't even looking at one complete business cycle, let alone multiple ones.

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Re: Why has the S&P500 gone up so much since 2009?

Post by Thesaints » Tue Mar 26, 2019 2:57 pm

Interest rates and QE.

Back in 2008 pundits clamored that the massive amount of cheap money thrown on the market would have caused a spike in inflation. It did, but not in the CPI-U (cost of butter, car tires, plane tickets...). The inflated prices were of stocks and bonds.

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RickBoglehead
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Re: Why has the S&P500 gone up so much since 2009?

Post by RickBoglehead » Tue Mar 26, 2019 2:59 pm

LiterallyIronic wrote:
Tue Mar 26, 2019 12:58 pm
Tigermoose wrote:
Tue Mar 26, 2019 12:29 pm
What's your take?
Because I was unable to invest anything from 2009 to 2012 and barely able to invest a few thousand per year between 2013 and 2016. Now that I'm able to invest a high percentage of my income, the stock market will stay relatively flat until I retire. At that point, it will immediately crash and stay down until I'm dead, when it will proceed to shoot back up again.
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Re: Why has the S&P500 gone up so much since 2009?

Post by bryanm » Tue Mar 26, 2019 3:23 pm

LiterallyIronic wrote:
Tue Mar 26, 2019 12:58 pm
Tigermoose wrote:
Tue Mar 26, 2019 12:29 pm
What's your take?
Because I was unable to invest anything from 2009 to 2012 and barely able to invest a few thousand per year between 2013 and 2016. Now that I'm able to invest a high percentage of my income, the stock market will stay relatively flat until I retire. At that point, it will immediately crash and stay down until I'm dead, when it will proceed to shoot back up again.
Username checks out.

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dogagility
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Re: Why has the S&P500 gone up so much since 2009?

Post by dogagility » Tue Mar 26, 2019 5:56 pm

randomguy wrote:
Tue Mar 26, 2019 12:39 pm
Because it went down so much in 2008😁.
Bingo.
Taking "risk" since 1995.

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Taylor Larimore
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The importance of start and end dates

Post by Taylor Larimore » Tue Mar 26, 2019 6:21 pm

Why has the S&P500 gone up so much since 2009?
tigermoose:

One reason is the way you measured it: From the bottom of a bear market to the (near) top of a bull market.

Different start and end dates can make a huge difference in past returns.

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

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Re: Why has the S&P500 gone up so much since 2009?

Post by Ferdinand2014 » Tue Mar 26, 2019 6:53 pm

Trader Joe wrote:
Tue Mar 26, 2019 2:03 pm
Because the S&P 500 is the cream of the crop in the greatest country on the planet.
True
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Re: Why has the S&P500 gone up so much since 2009?

Post by btownguy » Wed Mar 27, 2019 8:45 am

james22 wrote:
Tue Mar 26, 2019 2:08 pm
LOL
pward wrote:
Tue Mar 26, 2019 12:45 pm
2 words: The Fed
Any answer other than this is delusional.
I agree. Does this mean one should not be invested in the stock market from here on out?

Random Walker
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Re: Why has the S&P500 gone up so much since 2009?

Post by Random Walker » Wed Mar 27, 2019 9:04 am

What is really crazy is that it has gone up so much with so little volatility. In the past I posted this reference to an article by Jared Kized titled “The S&P 500 Goes Supernova”

viewtopic.php?t=265195

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Re: Why has the S&P500 gone up so much since 2009?

Post by DB2 » Wed Mar 27, 2019 9:06 am

pward wrote:
Tue Mar 26, 2019 12:45 pm
2 words: The Fed
Before I saw your post, I was going to state the same. :happy

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Earl Lemongrab
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Re: Why has the S&P500 gone up so much since 2009?

Post by Earl Lemongrab » Wed Mar 27, 2019 3:51 pm

"All of this mixed up and baked in a beautiful pie." [1]

1. Sara Bareilles – She Used to Be Mine

james22
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Re: Why has the S&P500 gone up so much since 2009?

Post by james22 » Thu Mar 28, 2019 2:37 am

btownguy wrote:
Wed Mar 27, 2019 8:45 am
james22 wrote:
Tue Mar 26, 2019 2:08 pm
LOL
pward wrote:
Tue Mar 26, 2019 12:45 pm
2 words: The Fed
Any answer other than this is delusional.
I agree. Does this mean one should not be invested in the stock market from here on out?
Probably, but since I've not the patience (fear missing out), I've only reduced my equity to 50%.

That half is primarily in undervalued and anti-fragile BAM and BRK though, rather than index funds. And the remaining primarily Stable Value rather than bonds.
25% BRK l 25% BAM l 8% SV (VSIAX) l 8% EM (VEMAX) l 4% FNMA/FMCC l 4% FNMAS/FMCKJ l 25% Stable Value

harvestbook
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Re: Why has the S&P500 gone up so much since 2009?

Post by harvestbook » Thu Mar 28, 2019 6:52 am

I only invest in 11-year and 9-year periods, so I don't pay attention to what happens over ten years.
I'm not smart enough to know, and I can't afford to guess.

SovereignInvestor
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Re: Why has the S&P500 gone up so much since 2009?

Post by SovereignInvestor » Thu Mar 28, 2019 6:59 am

Or it can be that in 2009 the S&P traded at hardly 10x forward earnings which were depressed and forwards earming tripped since then while the PE is now 16ish resulting in massive gains.

The fed seems like a weak excuse. The idea would be the PE is too high because of low rates.

1) The forward PE of 16 is lower than the average of about 17 since 1995 which saw a bubble from 1999-2001 and a depressed period from 2008-12.

2) the market discountd earnings at a long term interest and the Fed doesn't control long term rates. If anything with QT taking place they would be pushing up long term rates higher than otherwise.

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JoMoney
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Re: Why has the S&P500 gone up so much since 2009?

Post by JoMoney » Thu Mar 28, 2019 7:55 am

For the four quarters ending 12/31/2009, the S&P 500 paid $22.41 in dividends (per share)
For the four quarters ending 12/31/2018, the S&P 500 paid $53.75 in dividends (per share)
About 10.2% annualized growth
Meanwhile the yields on guaranteed investments/bonds have gone down
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Why has the S&P500 gone up so much since 2009?

Post by Glockenspiel » Thu Mar 28, 2019 10:08 am

GCD wrote:
Tue Mar 26, 2019 2:09 pm
It's a plot by the 1% to widen the wealth gap.
Because CEOs ask for more widgets and don’t increase wages accordingly, while giving their shareholders a bigger and bigger slice of the pie.

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HomerJ
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Re: Why has the S&P500 gone up so much since 2009?

Post by HomerJ » Thu Mar 28, 2019 10:26 am

btownguy wrote:
Wed Mar 27, 2019 8:45 am
james22 wrote:
Tue Mar 26, 2019 2:08 pm
LOL
pward wrote:
Tue Mar 26, 2019 12:45 pm
2 words: The Fed
Any answer other than this is delusional.
I agree. Does this mean one should not be invested in the stock market from here on out?
Except that the market has gone up this much in the past. Even faster in some cases.

Did the Fed cause all of those?
The J stands for Jay

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Re: Why has the S&P500 gone up so much since 2009?

Post by aristotelian » Thu Mar 28, 2019 11:10 am

Interest rates have been low. Nowhere else for money to go for return.

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Re: Why has the S&P500 gone up so much since 2009?

Post by james22 » Thu Mar 28, 2019 12:37 pm

HomerJ wrote:
Thu Mar 28, 2019 10:26 am
btownguy wrote:
Wed Mar 27, 2019 8:45 am
james22 wrote:
Tue Mar 26, 2019 2:08 pm
LOL
pward wrote:
Tue Mar 26, 2019 12:45 pm
2 words: The Fed
Any answer other than this is delusional.
I agree. Does this mean one should not be invested in the stock market from here on out?
Except that the market has gone up this much in the past. Even faster in some cases.

Did the Fed cause all of those?
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Re: Why has the S&P500 gone up so much since 2009?

Post by whodidntante » Thu Mar 28, 2019 12:53 pm

aristotelian wrote:
Thu Mar 28, 2019 11:10 am
Interest rates have been low. Nowhere else for money to go for return.
I think of the stock market as a store of wealth for mostly rich people. I mean, we get to play to, and some of the people reading this are at least "can actually afford a Porsche" rich, but I don't think engineers with their 401ks are causing the markets to move on every belch of Jerome Powell. So I think there is truth in what you wrote, there are not a lot of attractive, scalable, proven alternatives in a low rate environment.

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Re: Why has the S&P500 gone up so much since 2009?

Post by btownguy » Thu Mar 28, 2019 2:25 pm

pward wrote:
Tue Mar 26, 2019 12:45 pm
2 words: The Fed
There's also that convenient fact that millions pour $$$ into the market on a monthly or bi-monthly basis in the form of automatic 401k contributions.

Typ997S
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Re: Why has the S&P500 gone up so much since 2009?

Post by Typ997S » Thu Mar 28, 2019 2:40 pm

To paraphrase James Carville, “The Economy, Stupid.”

I also agree with those that answered the Fed.

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