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.