You might have noticed that Get Rich Slowly has been conspicuously silent about tomorrow’s Presidential election. There are reasons for that. I try to keep politics and religion out of this blog, except for in the Big Picture sense. Personal finance transcends that stuff. Everyone needs help with their money, Republican or Democrat, Mac or PC, Christian or Muslim or Jew.
Plus, I happen to think that both McCain and Obama are fine men and fine candidates, each with the best interests of the country at heart. I hate the vitriol that’s spewed from each side toward the other. It’s mostly senseless posturing and falsehoods. Thus, I’m pleased to break my political silence to present a single article on the subject: If you can’t say anything nice… I love this piece. (And in the spirit of the article, I ask you to avoid negative politicking in the comments.)
Leaving politics behind for another four years: JLP at All Financial Matters has done some amazing number crunching that might prove instructive in light of recent stock market turmoil.
- The 50 worst months in S&P history (and what followed) — JLP looks at what happens to the stock market after a bad month. 60% of the time, the one-year returns following a bad month were positive. The five-year returns were positive 84% of the time. “Stocks for the long run!” says JLP. Amen.
- Next, he looks at what would have happened had you invested on the last day of September 1929, just before the stock market crash. It would have taken you 15 years to recover your money. Not good.
- But wait! There’s more! Finally, JLP demonstrates what would have happened if you had used dollar-cost averaging throughout the Depression. Based on his parameters, an investor could have achieved an 8% return, even during the worst market of the last century.
One reason I love JLP’s blog is that he has the knowledge and the skill to run the numbers like this. It’s great stuff.
That’s all for now, except for a final reminder for U.S. citizens: Be sure to vote tomorrow!
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This article is about Spare Change