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http://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp http://www.investopedia.com/ask/answers/042415/what-average-... Over a lon

http://www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp http://www.investopedia.com/ask/answers/042415/what-average-... Over a long period of time that is what the market has returned. It is not guaranteed.One year it might be down 50% one year it might be 50%, but if you look at 30years S&P has returned about 7.5%. 10% is a just a round number makes math easier. You can plug in a different number my point its hard to get to 450 billion.

deleted 10y ago
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Retric 10y ago
The S&P only had 500 companies starting in 1957 using that as the start date you get: 6.170%. S&P has returned ~6.5% over the long term in inflation adjusted returns. However, the trend has been lower returns over time and inflation is currently very low. https://dqydj.com/sp-500-return-calculator/ https://dqydj.com/sp-500-return-calculator/ (You can look at the methodology, but they project further into the past.) 6.736% : 1871 to now 6.525% : 1900 to now 6.281% : 1930 to now 5.977% : 1960 to now Further, there is a lot of volatility in these numbers consider: 7.446% : 1990 to now 2.352% : 2000 to now PS Stable companies reasonably have a premium associated with that stability.
- samfisher83 10y ago
  Ok I plugged in sept 1986 - sept 2016 Here are the numbers I got: Annualized S&P 500 Return: 7.656% Annualized S&P 500 Return (Dividends Reinvested): 10.047% I didn't use CPI. If you want to invest into MSFT at this price be my guest. I believe it is overvalued at this level with such limited growth.
  - Retric 10y ago
    Which has nothing to do with long term price trends and everything to do with artificially timing the market. PS: If yesterday the market shot up 30% that's not a good sign for the next month.
tedunangst 10y ago
What does your formula say the S&P 500 is worth compared to how much it's trading for?

deleted 10y ago

[deleted]

Retric 10y ago

The S&P only had 500 companies starting in 1957 using that as the start date you get: 6.170%. S&P has returned ~6.5% over the long term in inflation adjusted returns. However, the trend has been lower returns over time and inflation is currently very low. https://dqydj.com/sp-500-return-calculator/ https://dqydj.com/sp-500-return-calculator/ (You can look at the methodology, but they project further into the past.) 6.736% : 1871 to now 6.525% : 1900 to now 6.281% : 1930 to now 5.977% : 1960 to now Further, there is a lot of volatility in these numbers consider: 7.446% : 1990 to now 2.352% : 2000 to now PS Stable companies reasonably have a premium associated with that stability.

samfisher83 10y ago
Ok I plugged in sept 1986 - sept 2016 Here are the numbers I got: Annualized S&P 500 Return: 7.656% Annualized S&P 500 Return (Dividends Reinvested): 10.047% I didn't use CPI. If you want to invest into MSFT at this price be my guest. I believe it is overvalued at this level with such limited growth.
- Retric 10y ago
  Which has nothing to do with long term price trends and everything to do with artificially timing the market. PS: If yesterday the market shot up 30% that's not a good sign for the next month.

tedunangst 10y ago

What does your formula say the S&P 500 is worth compared to how much it's trading for?