Calculating Your Returns
June 25, 2009

Click to View Visitors to this website should check out this great new calculator at Political Calculations:

The calculator incorporates the same S&P Composite data we often feature at dshort.com — the inflation-adjusted monthly averages of daily closes since 1871. With this nifty tool you can calculate the value of an initial investment and optional monthly additions for any range over this 138-year period.

For example, an initial investment of $1000 with $100 added monthly beginning in January 1990 would have had an average annual real (inflation-adjusted) gain of 11.67%, including dividends over the following ten years. Nice!

Let's consider another example, this time starting with the S&P inflation-adjusted all-time monthly-average high, which occurred in September 2000. A $1000 investment that month plus $100 monthly had an average annual real return of -2.96% by the end of last month — a negative return, and that's with dividends included!

What about the same investment regimen over an equivalent time frame (106 months) following the 1929 S&P Composite high? Brace yourself. It would have given you a positive average annual rate of return, with dividends, of 1.35%. Right — that's 4.31% per year higher than the current secular bear.