Author Topic: Worst 5 year period on record for stocks?  (Read 2754 times)

Dodge

  • Pencil Stache
  • ****
  • Posts: 790
Worst 5 year period on record for stocks?
« on: August 09, 2014, 11:42:53 AM »
The MMM article here:

http://www.mrmoneymustache.com/2011/06/06/dude-wheres-my-7-investment-return/

References a "stock market book I happen to be reading right now", that lists the following for the 5 year time period:

5-year periods: Worst: -2.35% Best: +28.55%

However, when simulating all 5 year time periods at www.cfiresim.com, I see the lowest 5 year point brought a $1,000,000 portfolio, with 0 spending, down to $669,673.  This is about -8% annually.  There are a few time periods in the 70's that got down into that range as well.

Why the big difference?

bacchi

  • Walrus Stache
  • *******
  • Posts: 5688
Re: Worst 5 year period on record for stocks?
« Reply #1 on: August 09, 2014, 06:50:39 PM »

Dances With Fire

  • Stubble
  • **
  • Posts: 220
Re: Worst 5 year period on record for stocks?
« Reply #2 on: August 10, 2014, 05:47:25 AM »
Reinvested Dividends.

 During the 1970's and 1980's yields were HUGE compared to today.

Dodge

  • Pencil Stache
  • ****
  • Posts: 790
Re: Worst 5 year period on record for stocks?
« Reply #3 on: August 10, 2014, 01:33:57 PM »
Inflation? https://en.wikipedia.org/wiki/Stagflation

That was it!  Something should've clicked when I mentioned the 70's :-P

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28428
  • Age: -999
  • Location: Seattle, WA
Re: Worst 5 year period on record for stocks?
« Reply #4 on: August 30, 2014, 10:51:53 PM »
We need a symbol that means "real" and one that means "nominal" and it should become standard practice to use them, just as it is standard practice to differentiate between Euros and Pounds with symbols.

Make it so.
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.