Did you know that the longest losing streak recorded for an investment in the S&P 500 index lasted for nearly 16 years?
It's true! A hypothetical S&P 500 index investor who plunked down good money in the index when the stock market peaked in value in September 1929, right before the Great Crash the following October, would not have begun breaking even and making money on their investment until 1945!
By contrast, the best annualized rate of return for a 16-year period in the S&P 500 index is 19.6%, which investors who put their money down in July 1982 might have realized. Meanwhile, the average annualized rate of return for an investment in the S&P 500 for time periods of any length is 9.4%.
To be fully accurate, actual returns realized from stock market investments are less than these values, given the effects of taxes, fees, commissions and inflation, but you can see why the stock market can be so attractive for the long term investor. That's why Political Calculations has mined stock market history data to create the following analysis and tools:
| The Stock Market |
|---|
| Subcategory | Title | Description |
|---|---|---|
| S&P 500 | Mapping S&P 500 Performance, Since 1871 | Our tool for modeling the best and worst case historical performance for investing periods of any length. Based on historical data going all the back to 1871! |
| S&P 500 | Mapping Stock Market Extremes and Mapping Average Stock Market Returns | The previous generation of our tool and analysis of S&P 500 market performance. |
| What If? | Lemony Snicket vs. King Midas | What if you had the worst possible luck in investing? Or what if you truly had the golden touch? Our tool takes the results of our oldest stock market performance analysis (see below) and shows you the absolute best and worst case outcomes! |
| Total Stock Market | Best and Worst Case Stock Market Investing | Our oldest analysis of the best and worst case returns for an investment in an index representing the total stock market (as opposed to just the S&P 500) while also taking inflation into account! |
| What If? | Lemony Snicket and the S&P 500 | We update our Lemony Snicket tool to consider your investment in the S&P 500. Plus, we add more gloom to your worst case investing scenario by bringing inflation into the picture.... |
How To Use Our Stock Market Tools
Long-term investors will get the most use out of our tools, although shorter-term investors might find them useful in playing the what-if game.
We recommend that you not focus so much on the best-case performance, or even the average-case performance of the stock market when you're deciding what long-term investment decisions to make. Instead, we suggest that you focus upon our worst-case scenarios when shaping your investing strategies - that way, you can be pretty well ensured that you will reach your investment goals even if you have the Lemony Snicket touch!
Return to the User's Guide to Political Calculations....
Labels: investing, stock market
Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:
ironman at politicalcalculations
Thanks in advance!
Closing values for previous trading day.
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