Two Centuries of 10-Year Returns Suggest Strong Future Performance
This came to me via email today. I apologize to whomever published it since I do not have a link.
The 10-year return of stocks ending in 2008 was the worst decade in two centuries! The annual return over the prior decade as of the end of December was -1.5%. Tack on the 20% drop since then and it is more like -3.5%.
When the market has performed this poorly in the past, the next 10 years have averaged an annual gain of 13.3%, ranging from a low of 7.1% p.a. to 18.6% p.a.
Past performance, of course, does not guarantee future results. However, with the market cheap and deeply oversold, I fully expect above average returns over the next decade.
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