Given that the S&P 500 Total Return Index has lost an annualized 1.45% this decade, it is only natural that investors rethink their commitment to equities. Some historical perspective is helpful. The table below shows the returns of the S&P 500 since 1918 (S&P 90 before 1957):
Source: Global Financial Data
That’s right - still 10.09% annualized return over a stretch of nearly 92 years that saw horrible world wars, peace, booming economies, depressions, good politicians, bad politicians and everything in between.
We will be the first to admit that indexing may not be appropriate for everyone. In fact, many of our products follow a methodology that seeks to rotate into other asset classes during extended periods of weakness in U.S. equities. However, it hard to look at the table above and not realize that the stock market offers the masses access to one of the most effective ways to build real wealth over time known to man.
