USA stocks 0% profit for past 10 years

[bearice]

If you had invested $100 in USA stocks in year 2000, their value in year 2009 is $100 only. That is a profit return of 0%. Have a look at this graph/chart.

http://seekingalpha.com/article/179444-gold-best-return-for-the-decade

 

[Arjun1]

Factor in inflation and the ten year return is probably close to -50%.
And yet we are still not at fair value if you look at the Schiller PE 10 Ratio:

 

[AK100]

Same in the UK.

One of the reasons I believe is management and advisors take so much money out of these firms that there's little left to propel the stock price higher over time.

Great racket for the insiders, lousy deal for the stockholders.

 

[Kassz007]

That calculation doesn't seem to take into account reinvested dividends.....which is massive.

 

[bearice]

Quote from Kassz007:

That calculation doesn't seem to take into account reinvested dividends.....which is massive.

Long-term investors have earned nothing from the stock markets. Also I think dividends must not be higher than 10% per year. That comes to 100% in 10 years.

 

[Kassz007]

Quote from bearice:

Long-term investors have earned nothing from the stock markets. Also I think dividends must not be higher than 10% per year. That comes to 100% in 10 years.

You are just pulling numbers out of your ass. And they're still incorrect. Reinvested dividends are compounded, and account for the majority of stock returns.

 

[failed_trad3r]

dividends are 40% of returns... capital gains only 60%

 

[Arjun1]

Considering that you have to pay taxes on dividends, dividend income barely overcomes the negative impact of inflation over time.

<a href='http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm'><img src='http://www.simplestockinvesting.com/images/SP500_dividend_inflation.png' alt='Dividend distribution rate of the S&P 500 index versus inflation'></a>

 

[bearice]

Quote from failed_trad3r:

dividends are 40% of returns... capital gains only 60%

yearly or 10 yearly (2000 - 2009)?.

 

[drukes1234]

Bearice, please attempt to speak proper English. Stop pulling dates and #'s out of your ass, if you want to pick the top of the market for a time when someone invested their money then I will be just as "objective" and pick the bottom. If someone invested in March 2009 they've almost doubled their money.


This is a very stupid thread about something that has been harped on for years.