Memorial Day musings

As we prepare to start a holiday weekend to honor those who made the ultimate sacrifice for our country, I wanted to give a little perspective on the stock market.  As you know, all that we’ve heard for the last ~11 straight weeks has been bad news, and while the stock market has steadily risen since it hit bottom almost 2 months ago, we’re still way down from the all-time highs reached in February.

However, the stock market is not about the short term, it’s about the long term.  So, here are the returns of the S&P 500 (a better measure of the stock market than the Dow Jones Industrial Average which is composed of only 30 stocks) over a few time periods ending today (meaning that all of these returns include the huge drop that happened in March):

1 year:  3.2% return

3 year:  24.1% (this translates into a 7.5% average annual return)

5 year average:  38.7% (6.8% average annual return)

10 year average:  171.7% (10.5% average annual return!)

I hope that this makes you feel a little better.  So take heart, stay safe, and have a great holiday weekend!

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