I write simple English because people from all the countries read elitetrader. Regarding profits, long-term profits such as 5 years or 10 years are more important than 1 year or 2 years profits. A trader can earn 100% profit in a single day but he can lose all the next day. Long-term profits determine how profitable are the investments.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
USA stocks 0% profit for past 10 years
- Thread starter bearice
- Start date
Quote from bearice:
I write simple English because people from all the countries read elitetrader. Regarding profits, long-term profits such as 5 years or 10 years are more important than 1 year or 2 years profits. A trader can earn 100% profit in a single day but he can lose all the next day. Long-term profits determine how profitable are the investments.
If you want long term returns, check out the S&P return for the past 50 years. 100 years. Tell me what you find.
You cherry picked the past 10 years because returns over the past 10 years support your bearish view on stocks. And, as already mentioned, you neglected to include dividends. It's irrelevant.
Quote from Kassz007:
If you want long term returns, check out the S&P return for the past 50 years. 100 years. Tell me what you find.
You cherry picked the past 10 years because returns over the past 10 years support your bearish view on stocks. And, as already mentioned, you neglected to include dividends. It's irrelevant.
Your homework assignment: find the dividend yield on the S&P 500 since 2000. Hint: it's very low and has been dwindling for years. Maybe dividends are making a comeback, but they're far from the levels they were 40-50 years ago.
Dividends reinvested only improve 10-year returns slightly. Sorry.
Quote from MKTrader:
Your homework assignment: find the dividend yield on the S&P 500 since 2000. Hint: it's very low and has been dwindling for years. Maybe dividends are making a comeback, but they're far from the levels they were 40-50 years ago.
Dividends reinvested only improve 10-year returns slightly. Sorry.
Sorry, but I am right and you are wrong. The homework took me five minutes.
http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm
"According to Standard & Poor's, the dividend component was responsible for 44% of the total return of the last 80 years of the index. If we are to analyze the historical profitability of stock investments, this portion cannot be neglected."
I'm sure you can cherry pick a certain time period where dividends accounted for less than 44% of S&P returns, but as you can see, on average dividend reinvestment is HUGE. You simply cannot throw out a statement saying "USA stocks 0% profit for past 10 years" without including dividends. It just doesn't make sense, and I'll call you out on it every single time.
Profit is significant for passive funds that reinvest dividents. Also, there are stocks with spectacular performance like AAPL. Just look at a 10 year chart of AAPL to see what your pessimism has missed. From $25 to $260+, so why are you making a general statement like that? So the statement is false.
http://www.google.com/finance?q=aapl
http://www.google.com/finance?q=aapl
This thread is about the returns of the US stock market over the past 10 years and I have yet to see posted the actual TOTAL returns. The SP500 is a generally accepted measure of the US stock market, per Morningstar, as of the 10 years ended 6-2-10, the TOTAL returns are an average annual return of -1.12%.
http://quicktake.morningstar.com/index/IndexCharts.aspx?Country=USA&Symbol=SPX&t1=1275582295
Yes this is cherry picked, the start date is near the market top in 2000, and certainly the returns of individual stocks vary significantly, but I think it is also important to highlight that not only can stocks lose significantly during a bear market, but they can lose over long periods. Anyone that has ever seen a chart of the Japan market should know this yet there are still many who cling to buy and hold thinking somehow things will be different here, that stocks HAVE to go up in the long run. They may, but they don't HAVE to.
Those on this site that are successful know there are better ways. Passive investors have cautioned me to be careful because active trading is so risky, yet they don't understand they are taking much larger risks than I am, for much less return. And a casual glance at the OP's link (which is almost 6 mo old), will show how significant diversification can be for those that do not wish to be active. Broad diversification including bonds and commodities would have significantly raised returns for passive investors, though at other times they would be lowered.
http://quicktake.morningstar.com/index/IndexCharts.aspx?Country=USA&Symbol=SPX&t1=1275582295
Yes this is cherry picked, the start date is near the market top in 2000, and certainly the returns of individual stocks vary significantly, but I think it is also important to highlight that not only can stocks lose significantly during a bear market, but they can lose over long periods. Anyone that has ever seen a chart of the Japan market should know this yet there are still many who cling to buy and hold thinking somehow things will be different here, that stocks HAVE to go up in the long run. They may, but they don't HAVE to.
Those on this site that are successful know there are better ways. Passive investors have cautioned me to be careful because active trading is so risky, yet they don't understand they are taking much larger risks than I am, for much less return. And a casual glance at the OP's link (which is almost 6 mo old), will show how significant diversification can be for those that do not wish to be active. Broad diversification including bonds and commodities would have significantly raised returns for passive investors, though at other times they would be lowered.
I have found some information for gold profits.
Gold returned profit of 25% for year 2009.
Gold has provided an annual average return of 26% over the past 10 years (between 1999 and 2008) according to world gold council.
Gold has provided profit of 210% approximately in past 5 years according to world gold council.
Gold has provided profit of 300% approximately in past 10 years from year 2000 to year 2009.
http://www.reuters.com/article/idUSTRE5B10OV20091231
http://www.financialexpress.com/news/gold-yields-17-average-return/448287/
http://seekingalpha.com/article/179444-gold-best-return-for-the-decade
Gold returned profit of 25% for year 2009.
Gold has provided an annual average return of 26% over the past 10 years (between 1999 and 2008) according to world gold council.
Gold has provided profit of 210% approximately in past 5 years according to world gold council.
Gold has provided profit of 300% approximately in past 10 years from year 2000 to year 2009.
http://www.reuters.com/article/idUSTRE5B10OV20091231
http://www.financialexpress.com/news/gold-yields-17-average-return/448287/
http://seekingalpha.com/article/179444-gold-best-return-for-the-decade
Not so.Quote from 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
You receive dividends meanwhile.
By the way, 10 years ago was 2000, the peak of the bubble.
In the final analysis the only thing that matters is total returns in constant dollars, for whatever period you are invested, relative to risk taken. The total returns of the S&P underwent a change from the 1970's on with the advent of fiat currency. If you omit dividends, and look at total returns in constant dollars, using the S&P as a benchmark, at best you can hope to get returns a little better than bonds, assuming bond returns are also expressed in constant dollars, AND you are taking on much more risk than had you invested in bonds only. At worst you lose money. That is why I always recommend to long term unsophisticated investors in 401K type plans that they take a modified index approach and only invest in dividend paying stocks, selected from only the best of those (meaning highest dividends with longest history of paying dividends and increasing those dividends) and then reinvest all dividends so that the returns can be compounded. If taxes rise on dividends this could have a very negative impact on total returns in constant dollars. Long term investing in stocks is not the sure path to wealth that Wall Street would have you believe. Inflation and taxes are taking an ever increasing bite, while risk has not decreased one iota..
Yes there will always be anecdotal stories, but these cases are the exceptions, and for the typical investor (not a Carnegie, Rockefeller, or Vanderbilt) highly unlikely.
Yes there will always be anecdotal stories, but these cases are the exceptions, and for the typical investor (not a Carnegie, Rockefeller, or Vanderbilt) highly unlikely.