06-26-2016, 11:44 AM
(This post was last modified: 06-26-2016, 11:47 AM by Dividend Watcher.)
I think Eric had a good point. A log-based chart shows a smoother picture which portrays a given percentage change as the same amplitude distance on the graph. From Yahoo I get:
It does point out how bad the 73-74, 2000/2002 and 2008 recessions really were although the 1992-2000 boom times are clearly visible. There have been some changes in market participation over this time frame due to cheaper commissions, lowered minimum initial purchases by mutual funds and, IIRC, more acceptance of odd lot* transactions. More importantly (read: bigger financial impact) was the institution of 401(k)s and IRAs with the subsequent reduction in defined benefit pensions. I have no specific numbers but I suspect the transition away from pensions to 401(k)s have balanced each other out over the long term.
The more I think about it, I think Kerim has a point about tailwind judging about the litany of articles discussing the woeful retirement savings predicament that exists today.
* For you youngsters, there was a time many years ago where you had to purchase stocks in "round lots" meaning 100 shares per transaction. You could purchase "odd lots" (not an even multiple of 100 shares) although commissions were significantly higher which would make the transaction uneconomical except for go-go growth stocks. Buying a small number of shares, for example 5, 10 or 20 regardless of share price, would not even be accepted by some brokerages. This was part of the reason for the popularity of DRIP accounts at transfer agents -- fees for DRIP accounts were also substantially lower.
It does point out how bad the 73-74, 2000/2002 and 2008 recessions really were although the 1992-2000 boom times are clearly visible. There have been some changes in market participation over this time frame due to cheaper commissions, lowered minimum initial purchases by mutual funds and, IIRC, more acceptance of odd lot* transactions. More importantly (read: bigger financial impact) was the institution of 401(k)s and IRAs with the subsequent reduction in defined benefit pensions. I have no specific numbers but I suspect the transition away from pensions to 401(k)s have balanced each other out over the long term.
The more I think about it, I think Kerim has a point about tailwind judging about the litany of articles discussing the woeful retirement savings predicament that exists today.
* For you youngsters, there was a time many years ago where you had to purchase stocks in "round lots" meaning 100 shares per transaction. You could purchase "odd lots" (not an even multiple of 100 shares) although commissions were significantly higher which would make the transaction uneconomical except for go-go growth stocks. Buying a small number of shares, for example 5, 10 or 20 regardless of share price, would not even be accepted by some brokerages. This was part of the reason for the popularity of DRIP accounts at transfer agents -- fees for DRIP accounts were also substantially lower.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan
“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan