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Wall Street History
https://www.gofundme.com/s3h2w8
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04/18/2003
Just the Facts
I thought we’d take a break for a while from the historical essays
and look at some numbers, especially since I just shelled out big
bucks for the 2003 Ibbotson Associates Yearbook, from which all
of the following is culled.
For the period 1926-2002, Annual Total Returns
[Geometric mean]
Large Company Stocks (S&P 500) 10.2%
Small Company Stocks . .12.1%
Long-Term Corporate Bonds.. .5.9%
Long-Term Government Bonds.. .5.5%
Intermediate-Term Govt. Bonds ..5.4%
U.S. Treasury Bills ...3.8%
Inflation 3.1%
Notes:
Small Co. stocks have been measured using various indices over
the years, including most recently the Dimensional Fund
Advisors Micro Cap Fund.
Long-Term Corporates: measured by the Salomon Brothers
Long-Term High-Grade Corporate Bond Index.
Long-Term Governments: a one-bond portfolio consisting of the
20-year Treasury.
Intermediate-Term Governments: a one-bond portfolio consisting
of the 5-year Treasury.
U.S. Treasury Bills: a one-bill portfolio of 30 days.
Inflation is measured by the Consumer Price Index.
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Compound Annual Rates of Return by Decade
.60s .70s ..80s .90s .00s 93-02
Large Caps .7.8....5.9....17.5....18.2....-14.6.....9.3*
Small Caps...15.5...11.5...15.8 15.1 ..0.9 .11.6
Inter. Govts 3.5 .7.0 11.9 .7.2 .11.0 ..7.3
T-Bills 3.9 .6.3 ..8.9 .4.9 ..3.8 ...4.4
Inflation ..2.5 .7.4 ..5.1 .2.9 .2.4 2.5
*Returns on the S&P 500 for the period 1993-2002
1993 10.0
1994 .1.3
1995 37.4
1996 23.1
1997 33.4
1998 28.6
1999 21.0
2000 -9.1
2001..-11.9
2002..-22.1
Tidbits
--The last time the CPI was over 3.4% for a single year was 1990. [1987-1990 4.4%-6.1% each year.]
--Ah, the importance of dividends in the old days, like 1975-85, when dividends on the S&P 500 contributed 4.3%-5.7%, annually, of the total return on the index.
More next week, including some figures on Growth vs. Value.
Brian Trumbore
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