- Investing in an passive fund, benchmarked to the S&P 500® Index can lead to exponential growth over time.
- Using the rule of 72, we show how investment capital can double about every ten years.
- With a long enough timeline, this simple notion can lead to incredible wealth creation.
Continue reading “Why Invest Forever? (Part 5)”
- Although the worst-case outcomes for the investing in the S&P 500® Index seem uninviting, the index has provided reasonable returns the vast majority of the time.
- The worst-case 5-year holding period for the index produced an annualized real return of -13.233%; however, over 80% of the time the 5-year holding period produced a positive real (inflation-adjusted) return.
- Further, the worst-case 45-year holding period for the index produced an annualized real return of only about 3.5%; however, 90% of the time the 45-year holding period produced a solid annualized real return of close to 5% or better.
Continue reading “Why Invest Forever? (Part 4)”
- Since 1973 the S&P 500® Index has posted considerable gains—over this period the index has averaged over 10% per year in gains after reinvesting dividends, before taxes and fees.
- However, investigating other 45-year periods (going as far back as 1871) leads to a more useful picture of the index’s performance across differing economic environments.
- According to history, it’s better to invest in the index over longer periods in order to increase the likelihood of providing favorable returns and decrease the likelihood of losing money.
Continue reading “Why Invest Forever? (Part 3)”