Research & Analysis

Capital Market History by Decades

Bear Market History  1929-2003

S&P 500 Index:  Annual Returns for Various Periods

·  S&P 500 Index: Annual Returns for 1-74 Years As of September 30, 2002

After the Bear & Long Term Returns 

Multiple Year Period Stock Returns 
Best, Worst & Median to December 31, 2003  (74 Years since January 01, 1928 & Sixty Year since January 01, 1944)

Dow Jones Industrial Average--Thousand Point Milestones

The following charts were created in an attempt to rationally view the financial world during the extremely stressful times following the equity market’s peak in the year 2000. I believe the “What If’s” chart is invaluable during periods of market despair. Although virtually every ten-year period shows significant fluctuations within the period, there is a high tendency for ten-year returns to be close to normal.

What If’s – Various Dates:

·  07/23/02 <= Analysis Created
·  10/09/02 <= Bear Market Low
·  06/30/03
·  12/31/03
·  06/30/04
·  10/08/04 <= Two Years After the Bear Market Low
·  12/31/04
·  06/30/05

·  09/30/05
·  10/10/05 <= Three Years After the Bear Market Low
·  12/31/05

·  09/30/06
·  10/09/06 <= Four Years After the Bear Market Low
·  12/31/06
·  06/30/07
·  09/30/07
· 12/31/07

The various dates for the What If’s charts provide historical evidence that this way of anticipating the future is useful. Times when recent returns have been the worst are often the best times to invest. These times are often also times when faith in the future is most in doubt. Each time I update the “What If’s” chart, I find myself wishing that expected returns could be stronger. Unfortunately, this would only be possible if long-term returns were to rise, or recent returns would have been lower. The delight of anticipating exceedingly high returns must be tempered by the pain and fear experienced in October 2002. If there is a lesson in all this, it seems to be to trust in the economic system to provide reasonable returns to prudent owners of businesses, to take what the market gives and not to allow emotion to overwhelm logic. Clearly, this is no small accomplishment!


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James O. Davis, Registered Representative [California Insurance License #0712211]