All posts filed under “investments

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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)