Why We’re Headed For Decent Market Returns Ahead

On January 14, 2000 the Dow hit 11,722 points.

As I write, it’s at 13,190 points… just 12.5 percent higher.

Before concluding the relative failure of American businesses over the past dozen years, you may consider a different measuring stick: business earnings growth.Valueline provides free historical earnings data for the Dow Jones Industrial stocks.

You might be surprised to hear that the past eleven years have seen fabulous growth.

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Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (2nd Ed. Wiley 2017) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use, Privacy Policy and the Comments Policy.

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10 Responses

  1. internaxx special deal for andrew hallam readers

  2. The finance industry has taken an old trick from the technology industry: keep selling better and better things at lower prices! I don't mind at all.

  3. Rhys says:

    This is a stunningly good article, Andrew! It really underlines the fact that you can't pay too much attention to the day-to-day headlines. Otherwise, you might not see the forest for the trees. And one good point you make in your book that you didn't mention in this one that I always keep in mind: Even If returns are flat over the next 10 years, that's a good thing for long term investors. Chances are earnings will be chugging along, merrily growing, giving us all the chance to load up on stocks at a discount before prices catch up with earnings. And regular rebalancing with the secret weapon of bonds is simply icing on the cake.

    Thanks again!

    • Thank you so much Rhys. I really appreciate your comment. The research for this one was certainly enlightening. I knew that the average U.S. business grew a lot, but I wasn't prepared for how much!

  4. Kenneth says:

    Thx Andrew! A very good positive message we all need to receive. Encourages me to re-read your book for a reminder that I'm still following the correct path of indexing over time with balance.

    • Thank you Kenneth,

      One of the best things about an indexed portfolio, as you know, is that it allows you to maximize your wealth potential by reducing fees and destructive emotions (if it's re-balanced unemotionally). This allows us to get on with the far more important things in life, like time with friends and family.



  5. Barry says:

    Hi Andrew

    I just had a look at the iShares US REIT and compared to my ETF index funds since February 2009 to now. There was a huge out-performance by the REIT; its almost back to previous highs

    • Hi Barry,

      A REIT and a regular market indexed ETF are completely different animals. A REIT is a real estate income trust and a market tracking ETF will track the stock market. You will have periods where one outperforms the other, then vice versa. There's certainly nothing wrong with owning both!



      • Barry says:

        Thanks Andrew

        Woulda, Coulda, Shoulda I guess

        I was looking at various portfolio's on Bogleheads and Canadian Couch Potato and some portfolios seem to have a bit of everything, it seems like a shotgun approach, in that if you throw enough lead into the air you'll likely hit something

        I did think about a US REIT some years back as a means of getting some exposure to the US Real Estate Market as it was copping a flogging

        A few people I know purchased housing in areas such as Altlanta, Florida, Las Vegas etc which seemed a bit too risky for me (Overseas Property, Property Management issues, Tenant Issues, Finance and Tax) a US REIT seemed like a good option, so it was interesting to compare the iShares REIT to a couple of the index funds

        With America;s debt woes and If inflation comes knocking, I wonder if there are other forthcoming opportunities for investors


        • Hi Barry,

          I think the world's best deal right now would be an Aussie buying a multi-unit building in Atlanta or Florida, if he or she could find a great property manager. Certainly worth considering!

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