The 5 Year Bull Market Myth!(4)

If you would have invested your money directly in the S&P 500 on January 3, 2000 to October 8, 2007 for a little over 7 years your compounded annual growth rate would have been .96% during the entire period.


Not even one percentage point.


Now that is a market that suddenly does not look so bullish does it?

And all we did was look back an additional two years.

What if we looked ahead?


What would the S&P 500 Index have to do over the next two to three years so that by 2010 this investor would actually be able to justify all of the risk that he/she just took over this 10 year period?


If by the year 2010 the market increases by 50% this lucky investor will have an effective 10-year rate of return of a whopping 4.20%!



The truth of the matter is that the next 3 years have to be incredible just to provide long term investors with somewhat competitive results.


Returns that they could have otherwise achieved with much less risk and much more certainty.




By Antonio Filippone