“Those who cannot remember the past are condemned to repeat it.”
With that in mind, let’s review the past so that we might catch a glimpse into the future.
The three best 12-year annualized forward returns for the S&P 500 (including dividends) going back to 1928 were:
- 19.0% (1988-2000)
- 18.3% (1950-1962)
- 18.2% (1944-1956)
An annualized return of 19% implies a $100,000 portfolio grows to over $805,000 in twelve years!
The three worst 12-year annualized forward returns were:
- -2.8% (1930-1942)
- -2.4% (1929-1941)
- 0.5% (2000-2012)
An annualized loss of 2.8% implies a $100,000 portfolio declines to about $71,000 in twelve years.
For context, the very long-term annualized return for the S&P 500 is around 10%. So we observe there is tremendous amount of volatility in even 12-year periods. Continue reading “Best and Worst 12-Year Investment Periods Throughout History”