40th Anniversary of "The Death of Equities"Submitted by Feldman Wealth Advisory, LLC on August 2nd, 2019
It has been 40 years since Business Week published it’s famous “The Death of Equities” cover story!
Despite the article being published as I approached my 4th birthday, I read it today and I found it fascinating.
What have we learned since August 13th 1979?
A few takeaways:
1. Equites do not die, and the world does not end. The S&P 500 closed on August 13th 1979 at 107.42; as I write it has closed over 3,000.
2. The S&P 500 annual dividend in 1979 was $6. The 2018 S&P 500 annual dividend was $53.61. Inflation is up barely 3 ½ times.
3. The Business Week article, condensed to four words: This time is different. In point of actual (long term) fact: this time is NEVER different. It just looks different – indeed as it did 40 years ago.
4. Financial journalism’s error is that it always extrapolates: “This is how things are right now; therefore this is how they’ll remain into the distant future, if not forever.” This is wrong.
Joseph M. Feldman, CFP®
Certified Financial Planner™ Professional
1Historical valuations are from www.bigcharts.com
2The raw data was obtained from Bloomberg (and from S&P) and organized by NYU.
*The Standard & Poor's (S&P) 500 Index is an unmanaged index that tracks the performance of 500 widely held, large-capitalization U.S. stocks. Indices are not managed and do not incur fees or expenses. It is not possible to invest directly in an index. Past performance is not a guarantee or indicative of future results.