Monday, April 12, 2021 7:42:10 AM
AIM of S&P500 since 1871 where cash wasn't permitted to go negative (no leveraging allowed)
That uses real S&P500 price (after inflation gain/loss) and assumes cash paced inflation. When so, with a average of near 50% stock you also had half of total stock dividends on top of the 2.1% annualised after inflation historic price appreciation benefits. Historically US dividends were higher, more like 4.5% compared to more recent 2% type amounts - which promotes more capital gains (faster price appreciation).
If you could secure cash rewards > inflation, then more the better. At times it has for instance been possible to lock into 3% real inflation bonds/TIPS. Or something like the Permanent Portfolio for instance, that since 1972 has provided a 5% annualised real.
That uses real S&P500 price (after inflation gain/loss) and assumes cash paced inflation. When so, with a average of near 50% stock you also had half of total stock dividends on top of the 2.1% annualised after inflation historic price appreciation benefits. Historically US dividends were higher, more like 4.5% compared to more recent 2% type amounts - which promotes more capital gains (faster price appreciation).
If you could secure cash rewards > inflation, then more the better. At times it has for instance been possible to lock into 3% real inflation bonds/TIPS. Or something like the Permanent Portfolio for instance, that since 1972 has provided a 5% annualised real.
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