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Smart Planning

I want to share a brief history of the markets during my 41 years of investing.   

I started investing the same month I started working, in January of 1983.

In the 20-year stretch that followed, the S&P 500 Index generated an annualized return of almost 13%, a period that included the nasty selloff of 1987 and a brutal 3-year bear market (down a cumulative 35%) ending 2002. 

Over the next 21 years ending this past December, that same index generated an annualized return of 10.53%, according to data taken from the Dimensional Fund Advisors website. Lest we forget, this period included the great recession of 2007-09, and the recent bear market of 2022.

The common stock allocation of my portfolio might not have generated those impressive returns during the past four decades, but probably wasn’t far behind. Why? Because even though it has been a wild ride at times (based on the chart below), I am a “buy & hold” investor of broad market index and passively managed funds.

What will the next 20 years bring? I am not counting on 13%, and I am not counting on 10.53%. I am counting on, and hoping for, global market returns in the annualized range of 6-9%, as forecast in Vanguard’s recent 10-year economic outlook

I would take a 6-9% common stock return in a heartbeat. 

Are your common stock holdings positioned to capture the lion’s share of that return over the next 10 or 20 years?

Are you prepared to adjust your financial plan along the way if those returns don’t materialize?

Next week I will reveal a number that blew me away with this current bull market as it relates to the next 20 years.

Stay tuned.

Common Sense Investing

Building and sustaining wealth and ignoring Wall Street can appear intimidating and insurmountable. It doesn’t have to be that way.

If you have $1 million or more of investible assets and are in or close to retirement, let's connect in a strategy call and discuss your investment and financial plan journey through life.