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Musicmystery -> RE: Imagine there's no stock market... (6/5/2010 8:56:29 PM)
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quote:
ORIGINAL: pahunkboy
quote:
ORIGINAL: Jeffff
EVERYONE took a hit. The stock market is, or should be viewed over the long term. By that I mean 10-15-30 years.
It was the Dot com boom that had people thinking they could turn 10,000 into 100,000 in 6 months.
If some one had a good position in the market for say 15years..... yes they lost moony recently.They are way ahead OVERALL
If you bought silver 15 years ago, and held it, I suspect you are close to even. It is the equivalent of burying money in the back yard. Safe but not an investment.
Very few things even last 10-30 years. Marriages, same house, corp mergers, jobs, 10 years is a lifetime.
I did not realize you were an expert of the price of silver.
What a deal- hand money over to stocks. ,... for 30 years. LOL
LOL indeed--you'd have been trashed in silver (and this is BEFORE adjusting for inflation, where you'd fall from $128.50, losing over 85% of your investment):
[image]http://www.zealllc.com/c2000/Zeal090800A.gif[/image]
Now, if you'd handed that over to stocks for those 30 years, you'd have gone from 759.13 to 9931.97 (adjusted for inflation, that $759.13 in 1980 would be $1950.95 in 2009 dollars--an increase of $7,981.02 after inflation on your $759.13 investment, or 509% of your original investment):
[image]http://www.theresourcecenter.us/images/StockCharts/DJIA-1980-2000.jpg[/image]
So, $10,000 over 30 years, from $48.70 at one point to $17.43 today, would be worth $3,579.06 now in silver.
$10,000 over 30 years in stocks, from 759.13 to 9931.97, would be worth $130,833.59 today--more than 36 times the value of the same amount invested in silver.
Further, silver doesn't pay dividends. Stocks do.
Let's say Grandma subtee, 30 years ago, nervous about the stock market, decided to invest for income rather than growth. So she put her $10,000 in some established company, 100 shares at $100 a share, that never grows, but pays a $2 dividend each quarter, for a modest but reasonable stock market return of 8%.
So, the first quarter rolls around, and Granny subtee earns a $200 dividend. She also sees the stock drop to $98 a share when it goes exdividend, but she has decided to automatically reinvest dividends, so she acquires 2.04 more shares. The company, a steady producer, sees its stock climb back to $100 over the next quarter, and the pattern repeats, expect that now Granny earns $204.08, and automatic reinvestment buys $2.08 more shares at $98 a share. And so it goes.
In 30 years, even with no growth in the stock, still at $100 a share, Granny will have 1129.451126 shares worth $112,945.11. Now, of course, we'd have to adjust these continually upwards to account for inflation. But $10,000 in 1980 would cost $25,699.76 in 2009 dollars, so Granny is still ahead, with 439% times her original investment after inflation.
Still kicks the ass out of silver. So yeah, laugh--but "handing your money over to stocks for 30 years" would have served far better. FAR better. Adjusted for inflation, the silver investor would have just 13.9% of his original investment left.
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