Stocks Over the Long Run

By on February 4, 2010

Crossing Wall Street has posted a look at the performance of equities since 1925 and it’s still pretty good; even after the past decade.

Over the last 84 years, the after-inflation return of the stock market (including dividends) has been about 6.6% a year. Historically, that number has been about 7%, but thanks to recent years it’s come down a lot.

What this means is that, on average, stock investors have doubled their money in real terms every 11 years. Of course, that’s an average. Over the last 11 years, the stock market hasn’t made any money in real terms.

SMA Comment: As seen above the market is now below the long term trendline of 7% per year which may signal better returns ahead. That is, if we can avoid The Great Depression II.

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