#S&P500 #RealReturns #HistoricalData
2000-2010: Negative Real Returns
In the period between 2000 and 2010, the S&P 500 experienced negative real returns. Despite briefly reaching a peak in 2007, the devastating effects of the Global Financial Crisis caused the index to plummet. By January 2010, the index was only valued at $1,073, a significant decrease from its 2000 value of $1,394. When adjusted for inflation, it wasn’t until August 2012 that the S&P 500 finally surpassed its January 2000 value.
1970-1985: Slow Recovery
Unlike the negative returns seen in the 2000s, the S&P 500 did not experience negative real returns during the 1970s. However, the index struggled to surpass its January 1970 value until November 1986 when accounting for inflation. This period marked a slow recovery for the S&P 500, showing the volatility of the market during those years.
1930-1955: Prolonged Negative Returns
In January 1930, the S&P 500 was valued at $22.79. Shockingly, it took until August 1951 for the index to rise above that value. When adjusting for inflation, the picture becomes even bleaker, with the S&P 500 experiencing prolonged negative real returns from 1930 to 1955. This period highlights the challenges investors faced during the Great Depression and post-World War II era.
Conclusion: The Resilience of the S&P 500
Despite these periods of negative or slow real returns, the S&P 500 has shown incredible resilience over the years. From weathering market crashes to overcoming economic downturns, the index has consistently rebounded and grown in the long run. It’s a testament to the strength of the U.S. economy and the power of long-term investing.
In conclusion, the S&P 500 did have negative real returns during the specified periods, highlighting the importance of understanding historical market trends and the impact of inflation on investment returns. It’s crucial for investors to consider these factors when planning their investment strategies for the future.
Note that website is only looking at share price, which doesn’t account for dividend reinvestment. [when you account for dividend reinvestment it adds a couple percentage to each years returns](https://www.morningstar.com/etfs/arcx/voo/performance)
But yes, when you pick a time span that is bookended with some of the largest recessions in history, it’s not surprising that you get a bad return over that period of time.
https://www.lazyportfolioetf.com/allocation/us-stocks-rolling-returns/
the problem with this is investing is not ‘invest lump sum at point a, and compare to point b xyz years later’ – its dca across that period.
its better to compare dca, youll find recovery for market crashes is more aggressive especially earlier on in ones investing journey.
Yep, these numbers are basically accurate. Everyone says you can’t time the market, but you can sure jump in at the nadir. Trouble is, at the nadir everyone’s terrified, traumatized, and often too poor to jump.
The other trouble is, for instance, 1932 really felt like a nadir. My grandfather said that by 1937 everyone had just about given up on life.
It did have negative real periods for some periods in history. I got downmodded recently for doubting future projections of 7% per year real returns net of taxes for SPY in another sub.
If you want to learn more, lookup Equity Risk Premium. And look where it stands right now.
I mean, you have figured out why you are supposed to invest over time instead of betting all on one day like a stupid lame casino