The above chart shows annualized forward returns of the SP500 since 1993. It shows that the worst you could have done as a passive investor in annualized returns was 7% if you had invested at the top of the 2000 bubble. Pretty amazing isn't ?!
But it's exactly why the financial industry has become so complacent and can't even acknowledge that these fantastic returns are the results of a limited 30-year selective datasets in the context of the greatest equity bull market in history, American exceptionalism, a massive influx of technology innovations and the greatest increase in money supply mankind has ever seen. Oh and with the lowest interest rates seen over a few thousand of years in the history of interest rates.
Yes, that is an anomaly. The same way peace would be considered an anomaly to the acute historian if you increase your dataset from 30 years to 300 years.
Please don't make the mistake of believing that this selective dataset is a good representation of future results. You are smarter than that.
Never, never forget that markets will, at one point, mean revert.
Good night and good luck!
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