How much would an investment in the S&P 500 be worth today, with dividends reinvested but adjusted for inflation, had you invested that money 5, 10, 15, 20 and 30 years ago? The following charts illustrate the annualized real rates of return over those periods of time. The original article has been edited here for length (…) and clarity ([ ]). For the latest ? and most informative ? financial articles sign up (in the top right corner) for your FREE tri-weekly Market Intelligence Report newsletter (see sample here)5 years: 10.99% 
10 years: 7.42% 
15 years: 7.20% 
20 years: 4.20% 
30 years: 7.74% 
As these charts illustrate, and as many households have discovered during the 21st century so far, investing in equities carries substantial risk. Households approaching retirement should understand this risk and make rational decisions about diversification. In the past, we've suggested that they should also consider fixed income alternatives for that part of the nest egg that will pay non-discretionary expenses not covered by Social Security and pensions. Unfortunately, this traditional wisdom has been less helpful in recent years owing to the Fed Zero Interest Rate Policy (ZIRP) and various stimulus strategies, which have collectively shrunk interest rates. With the end of ZIRP in December 2015 and several rounds of Fed rate hikes, it will be particularly interesting to see how this slow-motion roller coaster plays out in the years ahead. Scroll to very bottom of page & add your comments on this article. We want to share what you have to say! Related Articles From the munKNEE Vault: 1. ?Buy and Hold? Investing Can Be Hazardous To Your Wealth ? Here's Why One would think that following two major market corrections of over 50% within the last two decades, investors would have a better appreciation for how much time it takes to compound your way out of losses. While buy-and-hold investors who stayed true to their strategy over the last two decades are indeed ahead, they lost many years of valuable compounding time in a quest to ?get back to even.? The bottom line is that corrections and crashes matter a lot. 2. The Only Way To Make Money In the Markets Is With A Long-term Perspective ? That's It! The only way to make money in the markets is with a long-term perspective. That's it! Instant-access, low-cost trading and a mountain of stock data are both a blessing and a curse. The fact is we have too much information available to us, and most of it is useless noise. Support our work: like us on Facebook, follow us on Twitter, or share this article with a friend. munKNEE.com - Voted the internet's "most unique" financial site! (Here's why) The post Here's the Annualized Real Rate Of Return In the S&P 500 Over the Last 5, 10, 15, 20 and 30 years - How Did Your Returns Compare? appeared first on munKNEE.com. |
