RE: Investing

From: James Rogers (
Date: Wed Jun 07 2000 - 11:48:40 MDT

On Wed, 07 Jun 2000, altamira wrote:
> Could you tell me how you calculated the 9%-13% annual return and what
> adjustments you're referring to? Where did you get the data? When I was
> doing my research, I had a difficult time finding info on stocks that
> weren't included in indices such as DJ and S&P, even for fairly recent
> years, much less for a couple of hundred years ago.

These calculations come from various economists and financial firms
(which for the purposes of this email, mean "my memory"). Some of the
variations in figures come from dollar value adjustments (e.g. inflation)
and what indices (if any) were used to calculate the figures. Also the
starting and ending points of these averages vary somewhat, although this
does not have a significant impact on the figure.

Another good indicator is to look at mutual funds that have been around
for a really long time, where "really long time" = 100 years or so. Most
of these funds have a lifetime annual return rate in the 11-14% range, or
slightly better than most of the market indices. Obviously, if the
average stock market return was so much less, people would be putting money
into these obviously well-managed funds in droves. That people are not
indicates that they do not represent an unusually attractive investment
opportunity despite their long historical track record and reasonable
return rate. As a rule (and general mathematical necessity), mutual funds
in aggregate will track the stock market in the long run, with a few
exceptional over-performers and under-performers.

-James Rogers

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