The Ibbotson Yearbook Is Back

For many years, Ibbotson Associates has been known as the leading provider of long-term market data. If you’ve been anywhere near a brokerage office, you’ve probably seen their long-term charts showing how well the market has done.

Every year, Ibbotson (now owned by Morningstar) has released its yearbook which updates all the important data. For some reason, Ibbotson said it was discontinuing its yearbook this year. This prompted mass mourning by us data fiends.

I’m pleased to say that good sense prevailed and Ibbotson released its yearbook for 2015. I just got it in the mail. The data starts at year-end 1925 and runs through year-end 2015.

Here’s what the chart looks like:

Three

This is what $1 looks like if it were invested in the stock market over the last 90 years. The graph is logarithmic.

One dollar in December 1925 became $5,390 by December 2015. Annualized, that works out to 10.02%. That includes dividends.

Over that time, inflation has run at an annualized rate of 2.91%.

In real terms, the stock market has averaged a real return of 6.90%.

That means the market has doubled, in real terms, on average, every 10.4 years.

Posted by on September 6th, 2016 at 11:21 am


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