CM in MA

Lost Decade for Stocks?

For some, it's potentially worse than the authors illustrate. If a person had the worst timing in the world, and invested in the S&P 500 at the start of year 2000, their annualized return (including dividends) to date would be 0.03%. Of course, this means that if the first 20 years of this century are going to revert to 8% return levels, then there's going to be a heck of a bull market sometime during the next decade. For those wondering, to get approximately 8% annualized during the period 2000-2020, the S&P would need to reach roughly 6600 by 2020. To get 8% annualized from 2002-2022, the S&P 500 would need to reach just 3725. As Warren Buffett has long noted, the price paid determines the rate of return.