But over that same time period, equity investors earned an annual compounded return of less than 4%.
You might think that the investment return would be based on the compounded total return of those three indexes over six years.
In the Nineties Amgen stock had a compounded annual return of a lofty 52%.
However, the compounded annualized return (what you actually earned once volatility was factored in) was about 7.8%.
FORBES: Why Your Investment Returns Could Be Lower Than You Think
The vertical axis (Y axis) is the compounded portfolio return and the horizontal axis (X axis) is portfolio risk as measured by the annual standard deviation of return.
The dispersion is somewhat larger when measuring average annual returns (annualized return, recall, is the compounded or geometric rate of return during a multiple-year time period).
Peter Lynch's compounded average annual investment return during the 13 years was 29.2%.
Over the past decade, PAA has produced an compounded 26% annual return.
Should prices rise 15 percent a year compounded -- a return reminiscent of the great 1982-2000 bull market -- it would still take five years for stocks to regain their highs of 17 months ago.
CNN: Commentary: Don't let history be your guide to investing
Big Blue also did just a hair worse than buying the 5.3% yield on a 10-year U.S. Treasury the week Palmisano took over, which compounded to a 59% return over the same period.
The last point I want to make about juggling return assumptions is that problems have more than likely been compounded by administrators moving incrementally out of low interest return investments and upping allocations to equities (with dire consequences over the past 12 years), extending maturities (which increases risk), and cozying up to the low end of the investment grade spectrum.
Speculation that Johnson's media commitments would prevent a return to Olympic gymnastics was compounded when she tore knee ligaments while skiing.
BBC: Sport - US gymnast Shawn Johnson faces 'impossible' Olympic comeback
Over the long term, that compounded coupon is likely to be a larger component of overall total return than even sustained price appreciation, substantially smoothing over daily price fluctuations.
FORBES: Muni Bond Manager's Journal: Coupon Power Compounded
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