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In Investing, It’s When You Start AND When you Finish

Awesome infographic at NYTimes today illustrating the variance of returns to investors with different time horizons beginning at different points over the last ninety years. Click image for full size.

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Read the associated article here.

Talk to Frank about Investment Returns.

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  • http://blog.jasonhanley.com Jason Hanley

    Wow. I honestly had no idea. I always assumed that over the long term (20 years is long term, AFAIC) real returns were generally positive.

    That said, I wonder how this compares to different portfolios, like a “balanced” or “fixed income”? Would they really be much better?

    • Frank Voisin

      I would guess that they wouldn’t be better. Certainly fixed income would be affected by changes in interest rates over the holding period. Also, if you factor in inflation and look at real returns, that would wreak havoc in some holding periods.

      In housing, I think the idea that prices only go up in the long term has also been shown to be incorrect – it is highly dependent on when you bought and when you sell.

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