Posted on March 1, 2010.
The horrible performance of the S & P 500 vs. High Rate CD The notion that the average CD rate higher than 6 month maturity beat the performance of the S & P 500 is outrageous, and yet it happened. When prospective students investment management look back at this period in financial history, they look with amazement at how stocks in the S & P 500 companies have done.
Nothing I learned prepared me for this type of market
I was a student at the beginning of financial year 90, and there is never taught me believe that the performance of the stock market is dominated by the performance of plain vanilla boring CD rates high. The premium standard risk quoted in the S & P 500 was supposed to be around 8.4% above the risk free rate.
It is in bad economic times money mismanagement, or fraud ... Stock markets Played Terribly
Whatever the reason we have chosen to give the performance of equity markets in the horrific period of about 1995 to late 2008, the results are undeniable. Investors who put their money into the stock market at any time after, somewhere in mid-year 1995 would have been overwhelmed by high CD or simply stuffing in a mattress.
What Moving
What are the best years of clear investment results of the last dozen or so is that the long-term investment should not be done with blinders on. Simply return the money over an investment adviser or mutual fund historical returns and waits of 8-12% is a recipe for disaster. Prudence requires alertness to market movements and an increase in short-term investment.
