Stock Markets End Week Down
For the benefit of those who are interested in the performance of the stock markets, the following calculations are herewith provided. If you had formed a stock portfolio based upon one of the indicated, major stock market indices, and you had done this on the first trading day after the inauguration of George W. Bush in January of 2001, your portfolio would have earned you the following nominal, annualized rates of return:
Total Nominal Return on Investment
- Dow Jones Industrial Average:
- —1.12%
- Standard & Poor's 500:
- —12.04%
- NASDAQ Composite:
- —27.50%
In all three of these portfolios, your total return on investment would have been negative, meaning that the value of your portfolio would be lower today than it was the day before President Bush was sworn into office.
To see what the effect of this portfolio value erosion has been on a more standardized basis, the next two sets of figures put these numbers in terms of annualized rates of return.
Annualized Nominal Rate of Return on Investment
- Dow Jones Industrial Average:
- —0.27%
- Standard & Poor's 500:
- —3.00%
- NASDAQ Composite:
- —7.35%
The above figures merely present the first set in the more traditional way that most interest rates, rates of return, and other rates are expressed.
The final set of figures adjusts the stock market data for the effect of inflation over the holding period of the portfolio.
Annualized Real Rate of Return on Investment
- Dow Jones Industrial Average:
- —4.33%
- Standard & Poor's 500:
- —6.95%
- NASDAQ Composite:
- —11.13%
In other words, taking into account the erosion caused by inflation in purchasing power of the money put into the index portfolio, you would have lost, in the case of the Dow portfolio, about four-and-a-third percent of your invested money's purchasing power every year. In the case of the broader index of 500 large company stocks in the Standard & Poor's index, about seven percent of your invested money's purchasing power would have been lost every year. And in the case of the NASDAQ Composite index portfolio, more than eleven percent of your invested money's purchasing power would have been lost every year during the holding period.
This is the financial legacy, at the personal and very real level, of the Bush Administration.
The Dark Wraith leaves it to the readers to assess the meaning of this information.
Published 4/09/2005 02:05:00 PM
<< 8 Comments Total
What those numbers say to me is that Social Security Private accounts will be the worst thing since being beaten in the head and then poked in the eye with a sharp stick.
And not just once but repeatedly and expected to enjoy every last minute of it.
The only people that are going to make any money off of this miserable scheme are the stock brokers and other Wall street power types who get off on stealing other people's money. But I think that's been mentioned before around here.
I'm taking a break from the blogs tonight and going to see Bizet's Carmen in here in a little bit:)
-Gary A
Hello Dark Wraith,
A bit more than a year ago I moved a substantial portion of my portfolio to foreign equity funds and they have done, and continue to do, relatively quite well. Even this week they're green vs all red in US funds.
On the Dollar & oil...thought you might be interested in seeing this pdf file, especially page 4 on oil, but all the other commodities as well.
Seeing this info plus what you posted above tells me that smart money should be betting against the dollar....big time. Or, rather, should have.
Looks as though things went bad in early 2003 and continue that way. And with this maniac/moron in charge for 3+ more years we have entered one major sinkhole.
So the question is, since much of the world has bought our worthless "IOU's" are we going to take them along for the ride?
--Lymond
who now goes to scrounge up some $$'s to buy some €s. Or, is it too late for that?
Well, my 401K is proving only a moneymaker because of the employer match, the guarenteed return portion, and the foreign stock portion. I love the neo-cons-NOT.
As an aside, why do I see fancy logos on BlogScream when I'm on other blogs, but the one here on DWF has no logos? The one I see logos on is a white background version, in case that matters.
Good morning, Wild Clover.
It never ceases to amaze me that so many people know their own investment portfolios have not done well for quite some time, yet there is no general outcry in the news media about this far-reaching situation.
I keep wondering if someone is going to post a comment saying something to the effect, "Yeah, yeah, Wraith. That's been in the news over and over again. Why don't you tell us something the news networks haven't already made painfully obvious?"
Maybe I'm just following the wrong news feeds, but I just don't see this issue being brought up. More than four years of bad market has enormous consequences on investment portfolios intended to help in retirement.
Oh, well.
Now, about blogScream. Here on The Dark Wraith Forums, you're seeing something close to the actual, raw feed: this is the stream from which the distribution copies out in the Blogosphere are uptaking their data. When a remote client polls the stream, the code comes off this raw feed and mixes it with graphics and one of several background colors, and then the stream pours out through the client's copy on his or her blog.
It's sort of like going to an internal AP news site and seeing the streams of raw information, then picking up a newspaper and seeing that same information, but seeing it in a newspaper's print layout and format. It's the same information, but the visual appearance is more appealing in the newspaper version.
I'm really glad you asked me about that. It hadn't occurred to me that the regulars here would notice it all that much; but then again, sometimes I forget that the people who hang out here aren't the usual Internet surfer types.
The Dark Wraith needs to keep reminding himself of that.
Hey, Gary. Did you get to see Bizet's Carmen, and if so, what did you think?
About your comment on the only people who are going to make money off this, I've said on a number of occasions that the whole Social Security privatization scheme is nothing but a two trillion dollar jobs program for stockbrokers and bankers.
I suppose that in a way this is a good sign: at least the neo-cons haven't rejected the Keynesian economics prescription of helping an ailing economy by putting people to work with government-subsidized make-work jobs. It's merely a matter of re-allocating priorities away from all of those millions of useless poor people desperately trying to keep body and soul together. You know how it is with regular types of people: give 'em jobs, and they'll just go out and spend all of their wages on food and gasoline.
But give a Wall Street person a job, and he'll spend some of that money on a campaign contribution.
The Dark Wraith appreciates the value of a dollar well invested.
Good morning, Lymond.
There's an old saying among us old geezers of the investment world: if you ain't at the top of the food chain, then by the time you hear about a great investment opportunity, it's too late.
That's what in financial management we call, "the efficient market hypothesis," and a whole bunch of times every day, the financial world establishes how painfully accurate this is.
The Dark Wraith is not, of course, at the top of the investment food chain.
It means I have to keep hold of my ankles for a bit longer.
Well, yes, Guy Andrew Hall, but I guess the good news is that the view from ground level becomes considerably clearer.
The Dark Wraith looks for sunshine where the sun really don't shine all that much.