My retirements accounts are down 12.3% and 10.1% YTD (as of 7/11). The market is down again today so these number are likely to be a shade worse when the YTD return on the website updates later today.
At the same time the weather has been hot. In the 90’s and flirting with 100 degrees.
Today the S&P closed at 1228. Not much different from where it was 10 years ago at 1177. At less than half a percent appreciation per year plus about 1.5% yield that’s a whooping 2% per year return for a 10-yr investment window. Taking a look at the chart is unlikely dollar-cost-averaging would have significantly altered the return up or down over that period [hmm… sounds like an analysis for a future blog].
Not exactly a PSA for the merits of stock investing.
So, how’s my personal investment strategy going to change? Not much. My “fun” money account has been doing better because I’ve been selling SPY calls high and re-buying to cover low. This has been a helpful hedge so far and something I may wish to write about further. My “core” money allocation is unlikely to change… a mix of large/small/international low-cost index funds, some bond funds, and some cash.
Cool logic reflecting on history suggests that over any 20 year period stocks beat bonds… and likely commodities, cash, real-estate, etc. Perhaps the S&P500 values 1177 and 1228 are some worthwhile data points to start my blog with and to test against over the next ten years. Maybe these numbers will be part of an unprecedented counter example. Time will tell — but for now I’m putting much of my money on the bet that stocks will outperform in the end.