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Strategies & Market Trends : A.I.M Users Group Bulletin Board
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From: OldAIMGuy6/7/2025 12:03:21 PM
   of 18927
 
Some food for thought on stock and fund selection for long term portfolios.............................

I've mentioned before that I think about three things when searching for investments to have for AIM long term.
1) Price Appreciation over Time
2) Dividend Capture over Time
3) Profitable Volatility Capture over Time.........

This history shows the contributions by decade to Total Return from Dividends, Earnings and Stock Valuations for the S&P 500 stocks going back to the late 19th Century.



Here we see Total Return variance as each of these pieces contribute their effort. Each decade's average return was actually positive for these 15 time periods. It ranged from a low of 1% to a high of 18% over the time scale. We've heard that dividends have been shrinking as the tax penalty for collecting dividends is not favorable. Corporations now share by stock buybacks rather than dividends to keep the tax burden lower for investors. Only one of the 10 year periods showed negative earnings; The range was minus 5% up to a plus 11%. How stocks were valued over time ranged from a plus 10% to a negative 7%.

The total return for the entire period was around 9.3% on average in this history. You get a sense how each of the goals in my triple view can contribute to one's performance with such a time frame. Our AIM is the basis for my #3. It works well in conjunction with #s 1 and 2. I've not taken the time to try to figure my own Total Return for the '90s, '00s, '10s and up to 2020. My results aren't based upon the S&P 500, but only my own portfolio and AIM.

Best wishes,
OAG Tom

Buy from the Scared; Sell to the Greedy.....
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