U.S. stock market returns – a history from the 1870s to 2022

Re:U.S. stock market returns – a history from the 1870s to 2022 by lotsofpulp on Friday January 06, 2023 @01:18PM (#34278644)

> 5%. So, net of inflation, at the end of the 17 years, the market was valuing the DJIA's blue-chip companies at two-thirds less (!!!) than at the beginning of the 17 years.

This means nothing because the DJIA means nothing, and is not a good proxy for anything.

>The S&P500, with all dividends reinvested, net of inflation, returned -0.2%/year over those 17 years.

This means something, which is that reward is proportionate to risk. Investing in the broad US market means your investment is backed by the federal US government, which means it is riskless on a sufficiently long timeline (assuming the US is still relatively powerful in the world stage).

You invest in SP500 (or Russell 3000 or whatever broad market fund) to keep up with inflation, over many years, not to earn more than inflation. If you want to do that, you have to take risks.

[ Parent | on HN ]

Re:U.S. stock market returns – a history from the 1870s to 2022 by danielmarkbruce on Friday January 06, 2023 @01:25PM (#34278751)

DJIA is a decent proxy for market returns. If you don't think so, just look at the DJIA and the s&p total return index. They track pretty closely overall.

Buffett isn't a dummy. If DJIA meant nothing, he wouldn't have quoted it.

[ Parent | on HN ]