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S&P Yield 1926-2012

24 Aug. 2013

I just plotted data from good WW site www.measuringworth.com/datasets/sap/result.php

to see what happens:

Distribution S&P Annual Yield

Quantiles

     

100.0%

maximum

8.7100

99.5%

 

8.7100

97.5%

 

7.2820

90.0%

 

6.0500

75.0%

quartile

5.2300

50.0%

median

3.9400

25.0%

quartile

2.9800

10.0%

 

1.9480

2.5%

 

1.2120

0.5%

 

1.1400

0.0%

minimum

1.1400

Moments

   

Mean

4.0421839

Std Dev

1.5707756

Std Err Mean

0.1684048

Upper 95% Mean

4.3769616

Lower 95% Mean

3.7074062

N

87

So in last 87 years average Yield was ~ 4% and together with magic number ~ 6.65% of DGR (seekingalpha.com/instablog/725729-sds-se...) it gives us ~ 10.6% of return which is very close to number often quoted as total return.

On another hand Internet bubble drived S&P total return to high number (from ~ 8% before bubble to ~ 11% after the bubble collaps in ~ 2001). Nevertheless after ~ 1997 and till now market cap still seems on high note to compare with US economy (see picture below from www.vectorgrader.com/indicators/market-c...)

I don't know if we will return to previously normal market-cap/GDP ~ 0.6 or ratio ~ 0.8 will be new norm.

21 Nov 2013

Just for fun I compared S&P500 prices in 1950-1975 (multiplied to 20) and from 1990 till today using Yahoo data for adjusted closed prices for ^GSPC. The graph below

show IMO some similarities. Of course today (21 Nov 2013) we do not have 25 years data starting from 1990, so future will show if history repeat itself. Disclaimer: I don't like technical analysis.