Looking at these historical annual returns of the S&P 500 reminds me why academic finance recommendation of just investing in the market index(e.g. Vanguard S&P500 fund with superlow fees) for the long run works. The worst of the bear markets last for "only" 4 long years 1929-1932. The typical bear markets last 1-2 years. Even the Great Financial Crisis last only 1 year(2008) and rebounded in 2009. Albeit this was due to massive CB interventions. Look at the data here: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html The longest bull run was in the 90s for 9 years straight(1991-1999). The second longest bull run was 8 years 1982-1989. Since 2009, we are up for 7 years. So, potentially this bull market might run another two years to match the longest bull run. Or it can all come crashing down for the next 3-4 years. We'll see. Here are the same returns for Nasdaq 100 but only goes to 2012. http://financeandinvestments.blogspot.com/2013/09/historical-returns-for-nasdaq-100-1986.html I'm finally net profitable with some sort of consistency and using FundSeeder to track my returns and stats. I hope I can consistently beat the S&P 500 else it's just a waste of time. I "beat the market" in 2015. I'm poised to do it again in 2016. But this was a lot of work and stress and ups and downs since I'm doing in part-time and have a FT job and family. But it was a great learning experience. Perhaps not total waste of time since I've learned a lot and it can be a side income generation. Generating nice cash flow on the side while having a great FT paying job. In that sense, it's great net positive financially. What are you guys thoughts given these historical data? Where are we going next? Not that it matters to most of us since we are in and out all daytrades or swing trades. Just curious and cool to see the market returns over this long stretch of history. BTW, I'm not a perma-bull! I'm slightly bearish but looking at this makes me feel that timing the market one can get significant returns. But if you bought at the "top" (which is only apparent with hindsight) it can take a really really really long time to come back even. That is if you bought the market index. If you had bought individual stocks it might never come back even. trader99
it works when you examine the performance at an all time high, catch it during a strong correction or bear market and the outcome is another one perception is everything
Yes, that's what I mean. If you had bought at the highs(which this year is), the risk is even higher of ever making back even. You might have to wait years. Actually doing a bear market, if you are a superduper long term investors then it's probably better to buy. But I'm a short-term swing and intraday trader. A lot of this don't matter to me cuz I'm in and out in minutes or hours.
Trender 99; 3 years NasdaQQQ does better than SPY by a few %, according to WSJ[wall street journal] BUT there is a real good reason-reasons SPY/S& P 500 is benchmark-NOT QQQ- LOL.[ I use QQQ same as nasdaQQQ, not exactly right, but you get the point-QQQ has slippage in it, so its realistic] Another reason- QQQ has not taken out all time 2000 high- about $120 /+, as of today, anyway. Wisdom is profitable to direct.