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Thread: 21 Years of investing

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    Default 21 Years of investing

    Happy Sunday

    Please feel free to comment, all perspectives are welcome

    Looking at the 21-year average, we can see the longer you stay in, the greater your chance for success. The 1-day average win ratio is 54% while it climbs to 74% on a rolling 12-month chart.

    2001-2021 BASELINE.png

    ____________________
    Looking at the chart below, I must admit I was a bit surprised and at the same time disappointed. Back in 2001, I remember old timers telling me to just invest $100 a month and "Don't look at it." Over these past 21 years, if you wanted to be a millionaire, you would have needed to invest $1,250 monthly. This data doesn't consider the expense ratio of many of the mutual funds that were offered at the time.

    Time is your friend:

    $100 a month over 21 years, $25,200 invested earns $80,972, for a 321.23% return.
    $100 a month over 42 years, $50,400 invested earns $521,128 for a 1033.98% return.

    2001-2021 BASELINE-1.jpg


    ________________________
    Finally we have our beloved inflation chart, the total average is 2.19% I'm not sure if I believe that. Inflation is the real thief, if we lost an average 2.19% inflation over the past 21 years, did we lose 46% of our value or do we have less earning power?

    LINK: "According to the U.S. Bureau of Labor Statistics, prices for carbonated drinks were 48.23% higher in 2021 versus 2001 (a $9.65 difference in value)."

    2001-2021 BASELINE-2.png
    Retired (actively passive) 40G/60C _ STATS: 21-YR-BASELINE / SMAs / DEC


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  3. #2

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    Default Re: 21 Years of investing

    Happy Sunday

    Here are some observations from the previous 21 years for the S&P 500 Index.

    From the 5285 trading sessions, the baseline win ratio is 54% (bottom right corner in pic).

    66% closed above the 50 SMA.
    69% closed above the 100 SMA.
    72% closed above the 200 SMA.
    76% closed above the 500 SMA.

    Across these trading sessions,

    - We can see that when the index is trading below the moving averages, the win ratio falls into the 40s.
    - What is also interesting is that both the average gains & losses were significantly higher than the 21-year daily average. Perhaps this implies that when the index falls below these moving averages that volatility increases.

    - Conversely, when the index is above the moving averages, the win ratio increases but also the average gains & losses decreases below the 21-year daily averages. This might imply we now have stability, but with this comes slower gains & loses.


    21-YR-SMAs.png
    Last edited by JTH; 11-27-2022 at 12:46 PM.
    Retired (actively passive) 40G/60C _ STATS: 21-YR-BASELINE / SMAs / DEC

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