Sanity Check - S&P 34% growth in 1.5 years?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
tomdickorharry
Posts: 62
Joined: Fri Apr 16, 2021 9:06 am

Sanity Check - S&P 34% growth in 1.5 years?

Post by tomdickorharry »

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...
theorist
Posts: 1329
Joined: Sat Sep 28, 2019 11:39 am

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by theorist »

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...
I think you’re not including dividends. So, you’d have had a bit more.
Ferdinand2014
Posts: 2390
Joined: Mon Dec 17, 2018 5:49 pm

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by Ferdinand2014 »

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
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
Jags4186
Posts: 8198
Joined: Wed Jun 18, 2014 7:12 pm

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by Jags4186 »

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.
Last edited by Jags4186 on Tue May 17, 2022 8:03 am, edited 1 time in total.
artpennypacker
Posts: 69
Joined: Sun Jul 04, 2021 8:39 am

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by artpennypacker »

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.
User avatar
JoMoney
Posts: 16260
Joined: Tue Jul 23, 2013 5:31 am

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by JoMoney »

theorist wrote: Tue May 17, 2022 7:58 am
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...
I think you’re not including dividends. So, you’d have had a bit more.
Yeah, total return on Vanguard's 500 Index fund (VFIAX) over that 8/10/2020 - 3/22/2022 time period grew $10,000 to $13,747
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
Topic Author
tomdickorharry
Posts: 62
Joined: Fri Apr 16, 2021 9:06 am

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by tomdickorharry »

Thanks fellas! That's impressive growth, to me.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by Marseille07 »

tomdickorharry wrote: Tue May 17, 2022 8:28 am Thanks fellas! That's impressive growth, to me.
Well it is, but it rode on the back of rising PE from 30 to 39 and now coming back down.
User avatar
xraygoggles
Posts: 308
Joined: Sat Sep 15, 2018 3:30 pm
Location: Paradise

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by xraygoggles »

tomdickorharry wrote: Tue May 17, 2022 8:28 am Thanks fellas! That's impressive growth, to me.
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.
User avatar
3CT_Paddler
Posts: 3485
Joined: Wed Feb 04, 2009 4:28 pm
Location: Marietta, GA

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by 3CT_Paddler »

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). :happy
Topic Author
tomdickorharry
Posts: 62
Joined: Fri Apr 16, 2021 9:06 am

Re: Sanity Check - S&P 34% growth in 1.5 years?

Post by tomdickorharry »

xraygoggles wrote: Tue May 17, 2022 11:48 am
tomdickorharry wrote: Tue May 17, 2022 8:28 am Thanks fellas! That's impressive growth, to me.
But that was fueled by easy liquidity and historically low rates. Don't expect those type of numbers consistently.
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?

Now, we're back to high inflation and playing with interest rates, so should be interesting times...
Post Reply