Money Roundup: Five-Year Returns Edition

by Michael on Feb 9, 2014

Remember when the stock market tanked in 2008? It seems like yesterday, but it actually took place over five years ago. And, as Vanguard has rightly pointed out, that has a huge impact on historical return statistics.

For example, during the five-year period ending Dec 31, 2012 the Russell 3000 Index had an average annual return of 2.04%. But for the period ending Dec 31, 2013 that number jumped to 18.71%. Why? Because 2008 was no longer being counted.

In other words, the five-year average annual returns for pretty much all major equity indices skyrocketed overnight on New Year’s Eve. This is just one more reason not to pay too much attention to historical stats when making investing decisions.

And now… Here are some articles that caught my eye this past week:

That’s it. I hope you had a great weekend.


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