Investment brokers will confidently and with pride point out how stocks returned over 10% per year since the Great Depression.
The Russell 2000 index of small cap stocks returned a (-4.2%), compared with a 1.5% return for the Russell 1000 large cap index.
Their data show that large value stocks have returned 10.8% per annum compared with 8.7% for large growth stocks, and small value stocks have returned 13.9% versus 9% for small growth stocks.
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Since 1926 stocks have returned approximately 10% annualized and Treasury bills (a proxy for the so-called risk-free rate) have returned 4%.
The WorldCommodity Fund, which holds about 70% in basic materials like precious metals and 30% in energy stocks, has returned 13.3% this year to date.
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But, even with all the bad characters that have participated over the history of the financial industry, large-cap stocks have still returned 9.8% on an annualized basis.
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With a little education and effort, perhaps you even caught some stocks that have returned 500% like and Apple (AAPL), or traded intermediate trends for cash flow!
U.S. mutual funds that invested in large growth stocks in 2012 returned an average of 15.3%, while the similar ETFs tracking the index returned 16.4%, according to Morningstar.
In the twelve months since the market bottomed last year (from March 31, 2009 to March 31, 2010), the Russell 1000 (an index of large capitalization stocks) has returned 51.6%.
For example, large cap stocks have historically returned about 9% per annum in the U.S., but due to the new market realities, of slow growth, heightened volatility, punctuated by periodic financial crisis, an annual return estimate of 6% to 8% for a large cap stock portfolio might be more realistic.
In the first quarter, just 35% of actively managed U.S. stocks-focused mutual funds returned more than the indexes they use as benchmarks, according to research firm Morningstar.
When higher interest rates and as low global growth cut into inflation, the government quickly lowered interest rates and investors returned to Brazil stocks at the end of the year.
If stocks wind up the decade having returned 8% a year since the low in March 2009, the corresponding 20-year return would equal the worst 20-year period for stocks in history, 1929 to 1949.
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Cook also has been a big buyer of shipping stocks, including Ship Finance International, which returned 53% in 2006.
In an influential 1993 paper Narasimhan Jegadeesh, now a professor at Emory University, showed that a so-called zero cost strategy of buying stocks with the best six-month performance and shorting stocks with the worst six-month performance returned 12% a year.
"Japanese investors returned from Golden Week national holidays in buoyant mood, bidding stocks in the Nikkei 225 average to their highest since mid-2008, " said Andrew Wilkinson, chief economic strategist at Miller Tabak.
Over the 41 years the professors studied, such a portfolio would, with annual rebalancing, have returned 7.4 percentage points a year more than one that owned the riskiest stocks.
Moroney added three non-pharmaceutical health care stocks to Dow Theory's Focus List, which, according to the Hulbert Financial Digest, has returned an average of 11.6% per year over the five years ended Dec. 31, 2001.
There is ample justification for heightened risk aversion toward equities: over the past decade, U.S. treasuries have returned 8.4% a year, compared to 1.5% for domestic large-cap stocks, as small-caps have kept pace with bonds.
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