Stock Market History: 1900-2021
Uncover the trends and cycles of the stock market from 1900 to 2021, explore the impact of interest rates on bond funds, and navigate investment strategies for growth and income. Understand the dynamics of borrowing money for stock valuations and delve into the concept of total return through income and growth.
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Presentation Transcript
Stock Market History: 1900-2021 Source: stockcharts.com
The Last Secular Bear Market Cycle *Source: StockCharts.com
LONGEVITY RISK LONGEVITY RISK
Mortgage Analogy: Mortgage Analogy: Depleting Assets Depleting Assets
Bond Funds and Interest Rates *Though changes in interest rates are typically considered to be the major factor in determining bond values, many other factors can cause bonds to fluctuate.
Investing for Growth vs. Investing for Growth vs. Investing for Income Investing for Income Growth Income 1. Growth 2. Liquidity 3. Income 4. Safety 1. Income 2. Safety 3. Liquidity 4. Growth
THE TEETER THE TEETER- -TOTTER* TOTTER* Conservative Moderate Aggressive Corporate Bonds CDS Stocks Indexed Annuities Government Bonds Stock funds Conservative Moderate Aggressive Preferred Stocks Municipal Bonds REITs Fixed Annuities *Hypothetical illustration. Not all products are suitable for every investor. Product guarantees are issued by the good faith and credit worthiness of the Issuer. Past performance does not guarantee future results.
The Big Mac Index & Stamps Source: https://seekingalpha.com/article/4119246-big-mac-index-may-be-telling-truth-inflation
TR Total Return= I Income+ G Growth (Capital Growth/Loss) (Interest/Dividends)
Borrow Money Stock Valuations are higher, mathematically speaking cheaper to make major purchases Corporations can borrow money cheaper to buy back stock Investors move up the risk curve because interest- bearing options appear less attractive The result: stocks should should go higher.
PRE-RETIREMENT Accumulation Phase (Principal Growth) RETIREMENT Distribution Phase (Principal Return)
The 4% Cash Flow Rule: You can rely on the Growth ( G ) But what if you retired in the year 2000 and relied on the G? $1,000,000 should be able to withdraw 4% or $40,000 per year for life
