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I think it's even lower than 7% if you go back far enough: http://home.earthlink.net/~intelligentbear/com-dj-infl.htm http://home.earthlink.net/~intelligentbear
by lunaru 14y ago
I think it's even lower than 7% if you go back far enough: http://home.earthlink.net/~intelligentbear/com-dj-infl.htm http://home.earthlink.net/~intelligentbear/com-dj-infl.htm
The truth is, the stock market, given a long enough timespan, barely beats inflation.
- z92 14y ago> The truth is, the stock market, given a long enough timespan, barely beats inflation. I want to believe that.
- rjtavares 14y agoI'm not even going into how they change official statistics arbitrarily on a particular time period, but the article itself says that "Dividends are excluded, so the chart only shows capital gains. The dividend yield of the S&P is running near 2%." So, 1.9% above inflation plus 2% dividend yield, plus 2.3% current CPI, plus 2.7% "shadow CPI" (the number is from that article you posted) you get a 9% return. That means that facebook should be worth more, not less (since you are discounting at a lower rate).
- meric 14y agoAlso the dividend payout has not been 2% for all time - back in the 50's it was around 7%. http://www.financialsense.com/contributors/ronald-griess/comparing-historical-bond-yields-to-sp-composite-dividend-and-earnings-yields-is-silver-breaking-out http://www.financialsense.com/contributors/ronald-griess/com...