All posts filed under “stock market

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Facebook, There And Back Again

Two months ago, on March 17th, the news broke that a company called Cambridge Analytica was using Facebook to compile user data to target American voters.  The scandal, led to a multitude of events, from Facebook testifying in congress, to them changing their privacy policy (only slightly). On Wall Street, these news stories led to a 16% decrease in Facebook share prices, from $185,09, to $152,22 ten days later. However, now that the daily news stories on Facebook and Cambridge Analytica have passed, share prices have gone up again and closed at $186,99 on May 11. It shows how reactionary stock markets are. (source)

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Tension in GE Pensions

The Wall Street Journal opened this Sunday with a story about General Electric (GE), one of the US’ biggest companies. In the story, they talked about an alarming development: pension plans being under water and stock options from retirees. These stock options have lost so much value over the last decade, that multiple retirees have had to go back to work, just to afford retirement. GE’s market capitalization has fallen more than $460 billion since its 2000 peak, and according to the article, this can mostly be attributed to poor decision-making from above. (source)

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Long Term Investments

The graph above shows the annual real returns of investments made on the US stock market. Data is from the S&P composite index from the 1870s to 1957, and the S&P 500 index from 1957 to present. Overall, the average return across the 146 years has been around 8.5%, while the annualized return (also known as the geometric return) from start to finish has been some 6.9% per year.  Returns can be volatile: stocks have been plummeting between 30 – 40% five times (1917, 1931, 1937, 1974, 2008), while the market has gained more than 50% twice (1933 and 1954). (source)