The Twenty Craziest Investing Facts Ever

Courtesy of Michael Batnick

1. Since 1916, the Dow has made new all-time highs less than 5% of all days, but over that time it’s up 25,568%.
95% of the time you’re underwater. The less you look the better off you’ll be.

2. The Dow has compounded at less than 3 basis points a day since 1970. Since then its up more than 3,000%.
Compounding really is magic.

3. The Dow has only been positive 52% of all days. The average daily return is 0.73% when it’s up and -0.76% when it’s down.
See above.

4. The Dow has spent more time 40% or more below the highs than within 2% of the highs (20.6% of days vs. 18.4% of days)
No pain no gain.

5. The Dow gained 38 points in the 1970s
See above.

6. Why am I using the Dow instead of the S&P 500? They’re effectively the same thing. The rolling one-year correlation since 1970 is .95.
Stop wasting your time on this.

7. At the low in 2009, U.S. stocks were back to where they were in 1996.
Stocks for the long-run. The very long-run. Usually. Sometimes.

8. At the low in 2009, Japanese stocks were back to where they were in 1980.
See above.

9. U.S. one-month treasury bills went 68 years with a negative real return.

What’s safe in the short-run can be risky in the long-run.

10. At the bottom in 2009, long-term U.S. government bonds outperformed the stock market over the previous 40 years
Stocks generally outperform bonds, but there are no guarantees.

11. Gold and the Dow were both 800 in 1980. Today Gold is $1,300/ounce, the Dow is near 26k.
Cash flows > commodities.

12. Over the last twenty years, Gold is up 340%. Stocks are up 208%, with dividends.
You can support any argument by changing the start and end dates.

13. Since 1980, Gold is up 153%. Inflation is up 230%.
See above.

14. CTAs gained 14% in 2008 when stocks lost 37%. Since 2009 they’re up 2.5%. Stocks are up 282%.
Non-correlation cuts both ways.

15. If you had invested from 1960-1980 and beaten the market by 5% each year, you would have made less money than if you had invested from 1980-2000 and underperformed the market by 5% a year (A Nicky Numbers Special)
When you were born > almost everything else.

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Disclosure: Our teaching theme at Phil's Stock World is "Be the House, NOT the Gambler." Please see " more

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