Sunday, July 01, 2012

Lost Decade Update

Back in September last year I discussed the idea that the last decade was a lost decade as far as investment returns were concerned. Back then the MSCI World Index was outperforming the S&P 500 with almost twice the rate of return over the last ten years. And I had been outperforming both indices over that timespan. Now, 10 months on, the picture has changed a lot thanks to the ongoing European crisis and the underperformance of the Australian market:

The S&P 500 has caught up a lot and now has a 4.42% rate of return over the last decade, which at least beats inflation. This partly reflects, however, that June 2002 was in the depths of the "tech crash". The MSCI is now on 5.2% up from 4.15% last September. And I am at 4.54%, down from 4.61%.


Financial Independence said...

With the population aging in the developed world this is just a beginning, I believe. So 4.4% is inflation adjusted?

However S&P500 is not entirely representative as it does not take into account dividends.

Financial Independence said...

Please disregard my previous comment. I read the article from your previous post. It answered all the questions.

The only question stands whether it is inflation adjusted return or not. If not..the graphs would be looking somewhat differently ; -)