Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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June 2014: Don't Go Away This May

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Aside from the fact that stock brokers like to party at the Hamptons, there has never seemed to be much sense to "Sell in May and Go Away". This year (2014) seems especially so:

Note: CAGR ... Compound Annual Growth Rate. In this case, continuous compounding without reinvestment; just the returns from price increases. Total Return (with dividends reinvested) would be a higher number. My purpose here is not the number per se, it is the relative strength of various periods.

CAGR from 1950 to June 2014 = 7.41 %
CAGR from 1960 to June 2014 = 6.46 %
CAGR from 1970 to June 2014 = 6.93 %
CAGR from 1980 to June 2014 = 8.46 %
CAGR from 1990 to June 2014 = 7.28 %
CAGR from 2000 to June 2014 = 2.16 %
CAGR from 2010 to June 2014 = 13.33 %

decades

CAGR 1950s = 12.54 %
CAGR 1960s = 4.40 %
CAGR 1970s = 1.74 %
CAGR 1980s = 11.29 %
CAGR 1990s = 14.45 %
CAGR 2000s = -2.30 %
CAGR 2010s = 13.33 % Jan 2010 - Jun 2014

We always climb a wall of worry, this year no less than any other bull market. But this bull has been largely unheralded ... can we hope for more?

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Source: Yahoo Finance

Which mean do you prefer? The mean of the 1990's was 14.45%; I'd be happy to revert to that any time.
Posted by: George Ross Fisher IV   |   Jun 19, 2014 5:33 PM
This is all very well, but how about reversion to the mean?
Posted by: G3   |   Jun 11, 2014 5:28 PM

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