djia


0
Share via
1 share
djia

With the recent volatility creating instability in people’s portfolios and peace of mind, I thought I would take a look at how the DJIA (Dow Jones Industrial Average) has performed over the past 30 plus years since 1975. In this time frame, the DJIA has ranged from a high return of 38% in 1975 to a (-17%) loss in 1977. From 1975 to 2006, there were 23 positive years and 9 negative years. If you were to take a simple average of the yearly returns over this time period, you would come up with an average return of 10.83%

Does this mean you will earn a 10.83% yearly return by investing in the DJIA? NO. Some years you will earn that or more while others you will earn less, even lose money. What your overall return will be is not as simple as taking an average. Let me give you an example: Two people invest their money in different financial instruments over 5 years. The first investor earns a flat rate of 8% each year, while the second investor earns 15%, (-3%), 18%, (-12%), and 22% over the five years. Both of these investors have earned a simple average of 8% for the 5 years, but do they have the same amount?

Investor 1:

Initial Investment $10,000.00

After Year One 8% Gain $10,800.00

After Year Two 8% Gain $11,664.00

After Year Three 8% Gain $12,597.12

After Year Four 8% Gain $13,604.89

After Year Five 8% Gain $14,693.28

Investor 2:

Initial Investment $10,000.00

After Year One 15% Gain $11,500.00

After Year Two (-3%) Loss $11,155.00

After Year Three 18% Gain $13,162.90

After Year Four (-12%) Loss $11,583.35

After Year Five 22% Gain $14,131.69

As you can see, investor one earned almost $562.00 more even though they calculated to the same simple yearly average. However, in actual returns, the first investor earned over 5.5% more over the five year investment. I bring this example up to show the value of minimizing the negative returns. The best way to do this is by diversifying, not only in different stocks, but in different asset classes. Finally, keep in mind, historical data does not mean that the future will be the same, but rather can be used as a starting point for predicting a reasonable return.


Like it? Share with your friends!

0
Share via
1 share

What's Your Reaction?

cute cute
0
cute
damn damn
0
damn
adore adore
0
adore
scary scary
0
scary
vomit vomit
0
vomit
wtf wtf
0
wtf
cry cry
0
cry
laughcry laughcry
0
laughcry
confused confused
0
confused
fail fail
0
fail
fun fun
0
fun
geeky geeky
0
geeky
love love
0
love
lol lol
0
lol
omg omg
0
omg
win win
0
win
coinkudu

COIN KUDU® Fashion

The Best Crypto Fashion. Period.™
Sign up below for an exclusive coupon code you can use instantly on your first purchase :)
AVAIL NOW
This is a limited time offer
close-link

Want to be the Next MicroCap Millionaire?

Special Bonus (don't miss this!)

Win $100 ad spend on STAR LINK®
(enter your best email below)
Offer Expires In:
CK® Limited Time Offer
Win $100
close-link

LOVE FOREX?

Special Bonus (don't miss this!)

Win $100 ad spend on STAR LINK®
(enter your best email below)
Offer Expires In:
CK® Limited Time Offer
Win $100
close-link

COIN KUDU®

Learn the Secrets of Making Bigger Affiliate Profits Easily ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
5x
close-link

COIN KUDU®

How to Go from Beginner to Super Affiliate Instantly ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
affiliate
close-link

COIN KUDU®

Find Out the New Secrets of Affiliate Profits ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
affiliate
close-link

COIN KUDU®

Build Your Own Army of Elite Affiliate Soldiers ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
affiliate
close-link

COIN KUDU®

Surefire Strategies to Building Your Affiliate Team ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
affiliate
close-link

COIN KUDU®

Discover the Powerful System to Building Lifetime Profits ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
affiliate
close-link

COIN KUDU®

Learn the Secrets of Amazon Affiliate Marketing ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
amazon
close-link

COIN KUDU®

Learn the Secrets of Increasing Affiliate Profits with Bridge Pages ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
bridge
close-link

COIN KUDU®

Explode Your Affiliate Income while Generating Instant Cash ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
commission
close-link

COIN KUDU®

Boost Your Affiliate Income Instantly ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
commission
close-link

COIN KUDU®

Discover the Secrets to Mining Affiliate Commissions with Ease ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
commission
close-link

COIN KUDU®

Secrets of High Powered Affiliate Campaigns ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
commission
close-link

COIN KUDU®

Deadly Affiliate Marketing Mistakes ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
deadly
close-link

COIN KUDU®

Your Guide to Make Money with Instant Commission Affiliate Programs ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
instant
close-link

COIN KUDU®

Learn the Secrets of Winning those Big Affiliate Contests ($197 value for FREE but only while they last!)
Special Bonus (don't miss this!)

Win $100 ad spend on 
STAR LINK®
(enter your best email below)
Win $100
This is a limited time offer
win
close-link
Fashion & More

COIN KUDU®

 

SHOP NOW!
close-link
close-link
Win $100
don't miss this!
close-image
Cash Prizes!
spin to win
close-image

Love Bitcoin?

click here
close-link