Interesting Investment Facts & Lessons Learned

If you’re a dedicated market geek with plenty of time on your hands, you can uncover some very interesting things about stock market history and perhaps learn some interesting lessons from them. Below is a snapshot of some of them:

Since 1916, the Dow Jones Industrial Average (which predates the S&P 500 index and has performed very similarly through history) reached new all-time highs on fewer than 5% of all market days. Think about that: during a time period when the index has delivered 25,568% positive returns, investors have been under-water 95% of the time. Since 1970, the Dow has grown at less than .03% a day, but through the powerful magic of compounding, that has resulted in a 3,000% total gain.

If you’re the sort of person who might be inclined to bail out during a market decline, then it’s important to point out that 20.6% of the time, while these incredible long-term returns were being generated, the Dow was down 40% or more from its highs. 

One time period when you might have been inclined to bail out was during the 1970s. Over that entire decade, from January 1, 1970 to December 31, 1979, the Dow gained just 38 points.  (It’s over 25,800 today.) 

You also might have been inclined to bail more recently. At the low in 2009, U.S. stock indices were back to the point where they had been in 1996. However, it could have been worse. At their low in 2009, Japanese stocks were back to where they had been in 1980s.

If you’re convinced that gold is the ultimate hedge against inflation and a darned good investment for the long term, there are some statistics that don’t exactly back up the argument.  Since 1980, gold has risen 153% in value, while inflation, over the same time period, has risen 230%. A better inflation hedge? Gold and the Dow were both around 800 in 1980. Today, gold trades at $1,300 an ounce while the Dow is, as mentioned before, over 25,800.

The numbers may not seem convincing for the people interested to put their money in physical gold or even IRAs, but there is also no denying that they are a safe bet. Those, not willing to take risks can certainly go on these paths, taking the help of studies similar to the updated goldco review, and more available on the web.

Nevertheless, most of the gains in the equities markets are generated by a small handful of the wide universe of stock, and of course, it is impossible to predict which ones will be home-run investments. In fact, 96% of U.S. stocks generated a lifetime return that match one-month T-bills-the safest and lowest-returning investment you could put your money into.

You can find the whole list of the noteworthy facts here: https://theirrelevantinvestor.com/2019/03/13/the-twenty-craziest-investing-facts-ever/.