Archive for November, 2012

How is the stock market performing?

Some market pundits will tell you that the market has performed unusually well recently.  Others will tell you that it has under performed.  Still others will tell you that the market’s performance is similar to its very long-term average.  All of them are correct.

Judging a market’s performance is highly dependent on the time period you choose.

Examine the table below:

Measurement period starting date Time period (in years) VFINX annualized return
09/30/11 1 30.02%
09/30/10 2 14.58%
03/31/09 3.5 20.79%
09/28/07 5 0.97%
03/31/05 7.5 4.76%
09/28/02 10 7.90%
03/31/00 12.5 1.48%
09/30/97 15 4.61%
09/30/92 20 8.41%
09/30/87 25 8.44%

This table shows the performance of the Vanguard S&P 500 Index fund, VFINX, for periods ranging from one year to 25 years, all ending on the most recent quarter-end of 9/30/2012.  The historical performance ranges from less than 1% per year to more than 30% per year, depending on the time period you choose.  The performance figures include the returns from dividends as well as capital appreciation. Read the rest of this entry »

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