Investment “Fun Facts” That Live Up to Their Name

This edition of “Fun Facts to Know and Tell” truly lives up to its name as we review long-term investment return numbers, which are now updated through 2015. Remember these “Fun Facts”:

Compound Annual Returns from 1926 to 2015 (90 Years Inclusive)

12.0%              Small U.S. stocks

10.0%              Large U.S. stocks

5.6%              U.S. Gov't. bonds (takeaway: stock returns are two times bond returns)

3.4%              U.S. Treasury bills

2.9%              Inflation

Risk of Stock Market Loss over Time

27%                 1-year returns

14%                 5-year returns

0%                15-year returns

Historical Performance of Premiums over Rolling Time Periods

Total U.S. Stock Market Beat (Safe) U.S. Treasury Bills

15 years          96% of the time

10 years          85% of the time

5 years          78% of the time (this means 22% of the time it didn’t!)

1 year            69% of the time

U.S. Small-Company Stocks Beat U.S. Large-Company Stocks

15 Years          82% of the time

10 Years          72% of the time

5 Years          64% of the time (this means 36% of the time they didn’t!)

1 Year            57% of the time

U.S. Value-Style Stocks Beat U.S. Growth-Style Stocks

15 Years          97% of the time

10 Years          88% of the time (but not the 10 years ending 2015!)

5 Years          77% of the time (this means 23% of the time they didn’t!)

1 Year            61% of the time

[Tweet "Recovery is a long time, but about four years or less is reasonable for a long-term investor."]

Stock Market Downturns and Recoveries

Sept. 2000 to Sept. 2002 25 months down 49 months to recover
Nov. 2007 to Feb. 2009 16 months down 37 months to recover

  Recovery is a long time, but about four years or less is reasonable for a long-term investor.

As always, please contact us with any questions, news or comments.