20 Year 'Annual' Average (Each EoY From 1900)

This table was originally posted early in 1998!

[ Normxxx Here:       20 Year Annual Average from 1900 thru 1997 There is an important statistic that should be noted. The graph at left shows the Real Stock Market Average Return for every 20-year period ending from 1900 through 1997. Note the incredible symmetry of the pattern. All the peaks and bottoms were approximately 30 years apart. For instance, peaks occurred in 1910, 1940, and 1969 whereas bottoms occurred in 1920, 1950 and 1980. The last real (average annual) return peak occurred in 2000, right on cue, and the next bottom is due around 2010. Thus, the peak in 2000 was slated to usher in a '10 year time of trouble'. (This is just what happened after the three prior peaks, i.e. 1910-1920, 1940-1950 and 1969-1980. It didn't miss a beat even when 'interrupted' by the Great Depression, 1930-1938.) Importantly, note that the twenty year return bottomed near zero in each case. In other words, at each prior bottom, you earned zero real return over the prior twenty years. So, by 2010, expect the real Dow return to be around zero for the preceding 20 years, i.e., back to 1990! Since this is approximately coincidental with the low in P/Es, expect the P/E ratio to decline until around 2010 and then start up again.  ]