Taylor Larimore wrote: ↑Wed Oct 23, 2019 2:29 pm
Taylor
Jack Bogle's Words of Wisdom: "SCV underperformed from 1926 to 1942 (14 years), did nothing from 1944 to 1963 (another 19 years) and again from 1968 to 1976 (8 years) and yet again from 1979 to 1999 (another 20 years). That's a mere 61 years of the 79-year period where SCV was not a winning strategy."
I've seen the above presented/mentioned here many times and I have to agree with Jags4186 ...
Jags4186 wrote: ↑Wed Oct 23, 2019 2:59 pm
It appears the information Bogle had was wrong:
[Note: Not only does the quote not count the length of the intervals (number of years) correctly, the returns used appear to be just wrong. (I suspect that the reason the quote says 14 years for 1926 through 1942, when that interval is actually 17 years long, is that the comparison actually starts with 1928 data, making it 14 years they way the quote counts years, but actually being 15 years long.)]
He's obviously not using actual fund data, since neither an S&P 500 Index fund or a SCV fund existed in 1928, so I used return data for 1928-2018 from the Dimensional data base for the "Market" [S&P 500 Index and CRSP (1-10 deciles) Index] and the Dimensional US SCV Index. I calculated the returns over
the intervals Bogle quoted (and didn't quote). No cherry picking, I used his intervals.
Code: Select all
Compound Annual Growth Rate (CAGR)
Interval Duration S&P 500 Idx CRSP (1-10) Idx Dim SCV Idx SCV Performance vs "Market'
1928-1942 15 years 1.5% 0.8% -1.9% Underperformed -2.6% to -3.4%
1943 1 year 25.9% 28.4% 78.5% Outperformed 50.1% to 52.6%
1944-1963 20 years 15.1% 14.5% 16.9% Outperformed 1.7% to 2.4%
1964-1976 13 years 6.4% 6.5% 13.6% Outperformed 7.1% to 7.2%
1977-1978 2 years -0.5% 1.4% 22.7% Outperformed 26.6% to 29.6%
1979-1999 21 years 17.9% 17.6% 19.0% Outperformed 1.1% to 1.4%
2000-2018 19 years 4.9% 5.2% 11.4% Outperformed 6.3% to 6.6%
and for the entire 91 year interval:
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Compound Annual Growth Rate (CAGR)
Interval Duration S&P 500 Idx CRSP (1-10) Idx Dim SCV Idx SCV Performance vs "Market'
1928-2018 91 years 9.7% 9.5% 13.1% Outperformed 3.4% to 3.6%
Below are the year by year comparisons for those who might care to see the detailed data I used:
Code: Select all
Year S&P500 CRSP(Mkt) Dim US SCV
(J-D) Index Index Index
1928 43.61% 38.39% 32.36%
1929 -8.41% -15.19% -37.13%
1930 -24.90% -28.80% -43.61%
1931 -43.35% -43.52% -55.45%
1932 -8.20% -8.62% -10.52%
1933 53.97% 56.65% 125.32%
1934 -1.43% 4.09% -6.28%
1935 47.66% 44.43% 47.72%
1936 33.92% 32.32% 66.50%
1937 -35.02% -34.74% -50.56%
1938 31.14% 28.16% 32.55%
1939 -0.42% 2.83% -3.91%
1940 -9.78% -7.10% -8.11%
1941 -11.58% -10.08% -0.20%
1942 20.33% 16.12% 34.05%
1943 25.91% 28.43% 78.55%
1944 19.73% 21.49% 52.56%
1945 36.41% 38.50% 65.42%
1946 -8.07% -6.17% -10.43%
1947 5.70% 3.59% 8.81%
1948 5.51% 2.11% -4.94%
1949 18.79% 20.22% 19.71%
1950 31.74% 29.61% 63.41%
1951 24.02% 20.68% 9.93%
1952 18.35% 13.42% 8.95%
1953 -0.98% 0.67% -10.60%
1954 52.62% 49.98% 64.40%
1955 31.54% 25.21% 23.78%
1956 6.56% 8.27% 1.66%
1957 -10.79% -10.05% -18.58%
1958 43.37% 45.02% 77.04%
1959 11.98% 12.67% 14.99%
1960 0.46% 1.16% -10.74%
1961 26.89% 26.95% 29.21%
1962 -8.73% -10.18% -10.26%
1963 22.78% 20.98% 29.56%
1964 16.51% 16.13% 25.48%
1965 12.45% 14.46% 40.08%
1966 -10.05% -8.74% -9.64%
1967 23.99% 28.74% 69.32%
1968 11.08% 14.14% 48.98%
1969 -8.49% -10.91% -28.86%
1970 4.03% 0.00% -1.25%
1971 14.32% 16.15% 15.13%
1972 18.98% 16.84% 7.77%
1973 -14.67% -18.06% -30.25%
1974 -26.46% -27.04% -17.84%
1975 37.21% 38.75% 65.81%
1976 23.85% 26.76% 58.55%
1977 -7.18% -4.26% 22.39%
1978 6.57% 7.49% 22.96%
1979 18.42% 22.62% 35.39%
1980 32.41% 32.81% 24.44%
1981 -4.91% -3.65% 20.34%
1982 21.41% 21.00% 36.94%
1983 22.51% 21.98% 48.90%
1984 6.27% 4.51% 1.74%
1985 32.17% 32.17% 29.18%
1986 18.47% 16.19% 8.57%
1987 5.23% 1.67% -5.89%
1988 16.81% 18.03% 33.98%
1989 31.49% 28.86% 13.67%
1990 -3.10% -5.96% -24.20%
1991 30.47% 34.67% 47.08%
1992 7.63% 9.80% 34.80%
1993 10.07% 11.14% 25.96%
1994 1.32% -0.06% 2.57%
1995 37.58% 36.79% 31.49%
1996 22.96% 21.35% 25.88%
1997 33.36% 31.38% 38.62%
1998 28.58% 24.30% -5.51%
1999 21.04% 25.22% 8.15%
2000 -9.10% -11.42% 19.99%
2001 -11.89% -11.15% 28.59%
2002 -22.10% -21.15% -8.47%
2003 28.69% 31.62% 66.53%
2004 10.88% 11.97% 23.93%
2005 4.91% 6.16% 7.46%
2006 15.80% 15.48% 21.65%
2007 5.49% 5.81% -11.81%
2008 -37.00% -36.71% -36.90%
2009 26.46% 28.82% 51.30%
2010 15.06% 17.73% 30.93%
2011 2.11% 0.77% -6.56%
2012 16.00% 16.16% 16.65%
2013 32.39% 35.17% 41.95%
2014 13.69% 11.65% 3.46%
2015 1.38% -0.45% -8.43%
2016 11.96% 13.58% 37.20%
2017 21.83% 21.05% 7.38%
2018 -4.38% -5.02% -13.58%
ETA: Year by year return performance summary
For the 91 year period ...
SVC Index outperformed S&P 500 Index ....... 53 years to 38 years
SCV Index outperformed CRSP (1-10) Index ... 48 years to 43 years
As Paul says ... "There is no risk in the past." So, I'm not sure Bogle's quote about the past means any more or any less than anyone else's. It's just data. However, accurate data should be used when make such claims.
"Re-verify our range to target ... one ping only."