Generation Returns

Even an extended period of 20 years does not ensure historically-average cumulative returns in the stock market. Returns are dependent upon the level of valuation (P/E) at the start of the period. When the stock market P/E is relatively high and above the average, investors’ returns over the subsequent 20 years have been below average. When P/E is relatively low and below the average, investors’ returns have been above average and rewarding. [NOTE: the original version of this analysis included an estimate for fees, thus it reflected net total return (as noted in the legend); the current version reflects total return (before fees and expenses).]