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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (15267)	12/3/2002 12:32:09 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 19219

I keep a spreadsheet tracking the S&P performance back to 1970. As of the end of November, the 10 year average rate of return is just about 7.7%, a little bit lower than what I see in the chart. The average 30 year return is a bit below 7%. In order to maintain the current level on that chart, the S&P would have to recreate the performance from 1992 forward, which appears well within the realm of possibility for a few years. However it is not so likely that it will be able to keep up in the years from 2005 to 2010, unless we have a profound improvement in the world economy, or another bubble. If you assume a 7% average return over the next 7 years starting right now (SPX 922; compounded monthly), the S&P will reach 1503, just slightly below its former high. If it achieves that with steady growth, the chart will flatten out here for a couple of years and then decline steadily to near zero. If the market takes another turn down the chart could easily move into the sub 5% range. It would take an extension of the rate of loss of the last couple of years for another couple of years to get it down to zero in the next couple of years.