The new 2004 Ibbotson Associates Yearbook is out and since I
paid good money for it, and since all financial planners and
brokers use it (at least their marketing departments do…I know
from experience), it’s time to throw out the historical facts.
Compound Annual Rates of Return by Decade
……………………30s…40s…50s…60s…70s…80s…90s…00s
Large Cap Stocks..-0.1….9.2…19.4…7.8…5.9…17.5..18.2..-5.3
Small Cap Stocks…1.4…20.7…16.9..15.5..11.5…15.8..15.1..13.3
Long-Term Govt. ..4.9….3.2…-0.1….1.4…5.5…12.6…8.8…10.8
Inter.-Term Govt. ..4.6….1.8….1.3…..3.5…7.0…11.9…7.2…8.8
Treasury Bills…….0.6….0.4….1.9…..3.9…6.3….8.9….4.9…3.1
Inflation………….-2.0…5.4…..2.2….2.5…7.4…5.1….2.9…2.3
Notes:
00s…2000-2003
Large Cap – S&P 500
Small Cap – 5th capitalization quintile of stocks on NYSE, 1926-
81, various Dimensional Fund Advisors indices since 1982.
Long-term govt. – 20-year Treasury
Inter.-term govt. – 5-year Treasury
Treasury bill – 30 days
Inflation – CPI
1926-2003 Average Annual Return (geometric mean)
Large Cap Stocks…10.4
Small Cap Stocks…12.7
Long-Term Govt. …5.4
Inter.-Term Govt. …5.4 (yes, same)
U.S. Treasury Bills..3.7
Inflation.…………..3.0
And just for the heck of it, I thought I’d take a look at how the
S&P 500 has performed in the summer months during an
election year; another attempt to beat the punch.
………….June…July…August
2000…….+2.5…-1.6…..+6.2
1996…….+0.4…-4.5…..+2.1
1992…….-1.5….+4.0….-2.0
1988……+4.6….-0.4…..-3.3
1984……+2.2….-1.4…+11.3
1980……+3.0….+6.8…+1.3
1976……+4.3….-0.7….+0.1
1972……-2.1…..+0.4…+3.9
1968……+1.1….-1.7….+1.6
1964……+1.8….+2.0…-1.2
1960……+2.1….-2.3….+3.2
Source: Ibbotson Associates Inc., 2004 Yearbook
Wall Street History will return April 9.
Brian Trumbore
