Long-term investing should be 10-15 years or more but so many investors have months or 1-year time frames. This is not effective in investing to be so short-term in your thinking.
Since 1945 (after most regulations were in place as a result of the 1929 Great Depression like FDIC insurance), here are the ranges of compounded annual rates of return for U.S Large-cap equities:
5-year returns averaged from a negative -2.4% (1970-1975) to a positive 28.6% (1995-2000)
10-year returns averaged from a negative -3.6% (2000-2009) to a positive 19.4% (1950-1960)
15-year returns averaged from a positive 4.3% (1960-1975) to a positive 18.9% (1985-2000)
After the 5-year decline of -2.4% that ended in 1975, the 15-year annual average (1970-1985) was 8.8%. To get there, of-course, the 5-year period of 1975-1980 and 1980-1985 experienced 5-year returns of 14.8%. The perspective of history is important but not a guarantee.
The 5-year period from 2005-2009 was not positive but a negative -3.6% following the negative -2.3% decline of 2000-2005. So there are anomalies, indeed. Up to now, there has never been a negative 15-year period.
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.