The index fund 6.5% myth

[yadayada]

if you look at GDP correlation it seems looking at it with dividends reinvested would just skew results? your looking at how much the S&P increased in valued no?

[james22]

Ditch the Good, Buy the Bad and the Ugly

 

...GDP growth doesn’t matter for stock market investors.

 

http://www.gmo.com/websitecontent/GMO_Quarterly_Letter_4Q14.pdf

[handycap5]

i found the second page of this pdf very interesting. i believe if you extended into the 1800s, it would not change the results materially.

 

if you exclude the highly unusual 2000 period, the lowest number is 8.1 CAGR for any starting year 1929 to the present (over 10 years).

 

one can get wrapped around the axle on the question of "whether it is different this time" but I wouldn't bet on a material change in the past pattern.

 

http://www.realclearmarkets.com/docs/2014/04/ac_2014_04-StockMarketCenterfold.pdf