Jan

26

Many/most analyses of buy & hold use a model where a set amount is invested in the market at a specific time and then tracked over X years, which doesn't seem very realistic and certainly isn't the only viable model. So here is a different model:

The results below are for the following: Invest $1000 every month in the S&P 500 and collect the dividends at the end of each year [1]. For each year, calculate the total value of shares and dividends for the 5 years ending with that year, e.g., 1960-1964. Also calculate the 5-year total's % over/under the $60,000 investment during the 5 years. Negative years highlighted, and mean and sd shown at the end.

Version 2, corrected for overstating dividend, which adds 2009 as a
negative (slightly) year:

date   5yr Total   % over investment
Dec-15   $80,943   +34.9%
Dec-14   $91,399   +52.3%
Dec-13   $94,956   +58.3%
Dec-12   $77,990   +30.0%
Dec-11   $68,060   +13.4%
Dec-10   $67,534   +12.6%
—Dec-09   $59,566   -0.7%
—Dec-08   $47,067   -21.6%
Dec-07   $77,666   +29.4%
Dec-06   $80,894   +34.8%
Dec-05   $72,530   +20.9%
Dec-04   $68,208   +13.7%
Dec-03   $60,778   +1.3%
—Dec-02   $47,322   -21.1%
Dec-01   $63,044   +5.1%
Dec-00   $82,804   +38.0%
Dec-99   $112,527   +87.5%
Dec-98   $116,433   +94.1%
Dec-97   $108,250   +80.4%
Dec-96   $95,239   +58.7%
Dec-95   $88,800   +48.0%
Dec-94   $74,533   +24.2%
Dec-93   $81,002   +35.0%
Dec-92   $84,726   +41.2%
Dec-91   $87,246   +45.4%
Dec-90   $76,904   +28.2%
Dec-89   $91,919   +53.2%
Dec-88   $84,916   +41.5%
Dec-87   $84,079   +40.1%
Dec-86   $97,688   +62.8%
Dec-85   $96,159   +60.3%
Dec-84   $84,680   +41.1%
Dec-83   $90,854   +51.4%
Dec-82   $86,713   +44.5%
Dec-81   $79,628   +32.7%
Dec-80   $89,410   +49.0%
Dec-79   $76,722   +27.9%
Dec-78   $72,193   +20.3%
Dec-77   $69,175   +15.3%
Dec-76   $74,530   +24.2%
Dec-75   $63,669   +6.1%
—Dec-74   $50,482   -15.9%
Dec-73   $66,026   +10.0%
Dec-72   $79,389   +32.3%
Dec-71   $71,656   +19.4%
Dec-70   $67,302   +12.2%
Dec-69   $66,362   +10.6%
Dec-68   $76,575   +27.6%
Dec-67   $76,567   +27.6%
Dec-66   $70,349   +17.2%
Dec-65   $83,286   +38.8%
Dec-64   $83,760   +39.6%

mean:   $78,856   +31.4%
sd:   $14,535   24.2%

max:   $116,433   +94.1%
min:   $47,067   -21.6%


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