Sanity Check - S&P 34% growth in 1.5 years?
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Sanity Check - S&P 34% growth in 1.5 years?
On 8/9/2020 the S&P500 was at 3372.85, while on 3/22/2022 it was at 4545.86 - a 34% growth.
Does that really mean if I had 500K in a S&P500 index that tracked perfectly, that I would have made 170K from 8/9/2020 to 3/22/2022? In a year and a half?
I guess, by extension, if one had bought during that March 2020 dip at 2304.92, it would be a 97% growth rate...doubling your money?
Just making sure I've got my head screwed on straight...
Does that really mean if I had 500K in a S&P500 index that tracked perfectly, that I would have made 170K from 8/9/2020 to 3/22/2022? In a year and a half?
I guess, by extension, if one had bought during that March 2020 dip at 2304.92, it would be a 97% growth rate...doubling your money?
Just making sure I've got my head screwed on straight...
Re: Sanity Check - S&P 34% growth in 1.5 years?
I think you’re not including dividends. So, you’d have had a bit more.tomdickorharry wrote: ↑Tue May 17, 2022 7:52 am On 8/9/2020 the S&P500 was at 3372.85, while on 3/22/2022 it was at 4545.86 - a 34% growth.
Does that really mean if I had 500K in a S&P500 index that tracked perfectly, that I would have made 170K from 8/9/2020 to 3/22/2022? In a year and a half?
I guess, by extension, if one had bought during that March 2020 dip at 2304.92, it would be a 97% growth rate...doubling your money?
Just making sure I've got my head screwed on straight...
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Re: Sanity Check - S&P 34% growth in 1.5 years?
No you would have not made $170K, you would have made $209,831. A real fund of the the S&P 500 (FXAIX - Fidelity 500 Index Fund) during the time you specified including all fees and reinvested dividends, but not including any taxes.
https://www.portfoliovisualizer.com/bac ... ion1_1=100
https://www.portfoliovisualizer.com/bac ... ion1_1=100
Last edited by Ferdinand2014 on Tue May 17, 2022 8:05 am, edited 2 times in total.
“You only find out who is swimming naked when the tide goes out.“ — Warren Buffett
Re: Sanity Check - S&P 34% growth in 1.5 years?
Between 8/9/20 and 3/22/22 $10,000 would have grown to $13,747.86 in the Vanguard SP500 Fund.
Between 3/22/20 and 3/22/22 $10,000 would have grown to $20.791.98 in the Vanguard SP500 Fund.
Between 3/22/20 and 3/22/22 $10,000 would have grown to $20.791.98 in the Vanguard SP500 Fund.
Last edited by Jags4186 on Tue May 17, 2022 8:03 am, edited 1 time in total.
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Re: Sanity Check - S&P 34% growth in 1.5 years?
If you had done something like voo, essentially. Plus the dividends minus the tiny fund fee. But no one hits the bottom to top like that. Dividends are forever, and tax man cometh.
Re: Sanity Check - S&P 34% growth in 1.5 years?
Yeah, total return on Vanguard's 500 Index fund (VFIAX) over that 8/10/2020 - 3/22/2022 time period grew $10,000 to $13,747theorist wrote: ↑Tue May 17, 2022 7:58 amI think you’re not including dividends. So, you’d have had a bit more.tomdickorharry wrote: ↑Tue May 17, 2022 7:52 am On 8/9/2020 the S&P500 was at 3372.85, while on 3/22/2022 it was at 4545.86 - a 34% growth.
Does that really mean if I had 500K in a S&P500 index that tracked perfectly, that I would have made 170K from 8/9/2020 to 3/22/2022? In a year and a half?
I guess, by extension, if one had bought during that March 2020 dip at 2304.92, it would be a 97% growth rate...doubling your money?
Just making sure I've got my head screwed on straight...
From 3/23/2020 - 3/22/2022 it grew to $20,791
People that were leveraged up making market bets over that period saw some incredible growth, I have co-workers that think think they're skilled traders now. I suspect if they had made equivalent leveraged bets and just left it alone (not trading) they would have done even better.
A rising tide lifts all boats.
When the tide goes out, you find out who's been swimming naked.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
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Re: Sanity Check - S&P 34% growth in 1.5 years?
Thanks fellas! That's impressive growth, to me.
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Re: Sanity Check - S&P 34% growth in 1.5 years?
Well it is, but it rode on the back of rising PE from 30 to 39 and now coming back down.
- xraygoggles
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Re: Sanity Check - S&P 34% growth in 1.5 years?
But that was fueled by easy liquidity and historically low rates. Don't expect those type of numbers consistently.
Simplicity is the key to brilliance - Vti & chill.
- 3CT_Paddler
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Re: Sanity Check - S&P 34% growth in 1.5 years?
Now do real growth in the S&P 500 (or comparable large cap index) from 1966 to 1982...
Answer: It was a 0% real (inflation adjusted) return over 16 years.
You cannot know what the next 10 years will look like when it comes to returns. Today's good times usually feed into tomorrow's tough times and vice versa. Give it enough time and it will all even out (maybe).
Answer: It was a 0% real (inflation adjusted) return over 16 years.
You cannot know what the next 10 years will look like when it comes to returns. Today's good times usually feed into tomorrow's tough times and vice versa. Give it enough time and it will all even out (maybe).
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Re: Sanity Check - S&P 34% growth in 1.5 years?
I wouldn't expect those type of numbers on average anyway. I thought the historical return of S&P was something like 9 to 9.5% for the last hundred years or so? I was thinking I read that in Bogle's Little Book of Investing. Given our inflation of the last 40 years averaging around 2%, that gives us a real return of 7% or so?xraygoggles wrote: ↑Tue May 17, 2022 11:48 amBut that was fueled by easy liquidity and historically low rates. Don't expect those type of numbers consistently.
Now, we're back to high inflation and playing with interest rates, so should be interesting times...