Market returns were not good for the calendar year. This is clearly the worst year in decade. Here are the annual returns for stocks and bonds for the past four years following the recommendations in Nest Egg Care – using the specific mutual funds and ETFs that I own. See detail here.
For this past year my stocks declined by about -8%. Bonds were slightly positive. The -8% return for stocks is my combination (my weights) for US and International. Returns for International stocks were well below those of US stocks.
The real return for US stocks was about -7.9% (-5.3% nominal adjusted for 2.8% inflation). Statistics tells us this is about a one in five-year event: based on the historical variability in return rates for stocks, it’s 20% probable that we would experience a real return of -7.9% or worse in a year.
US stocks had their head above water for the first 11 months in the year. December was the worst December for stocks since the Great Depression, more than 85 years ago. My fund for total US stocks declined by -9.3% in the month.
If you invest in the same types of funds that I do, you could have slightly different returns: you may own, a total US stock fund or ETF from Vanguard or Blackrock, and not the one I own from Fidelity, for example.
My year to recalculate our Safe Spending Amount (SSA) runs from December 1 through November 30. That’s what I watch. You can see my returns for the last four years – not always based on November 30 – here.
Returns this year are above the average of other investors, but not wildly so: my largest holding – total US stock market – falls in the 46th percentile of similar funds (lower is better). The difference will come from cumulative returns. Based on history, the cumulative returns for Patti and me will be in the top 5% or so relative to those who invest in actively managed funds. See here.
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