US History

Stock Exponential Growth Rates

From my Powerpoint slide show of real word examples of exponential growth in a that includes 11 graphs of economic and financial data.  US stock market chart is an example of exponential growth rate that remained the same over time.The GE stock price chart is an example of exponential growth rate that changed over time.

Data from MeasuringWorth.com. Charts created using OmniGraphSketcher.

 
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Return on Gold, Stocks, Bonds, and Bills since 1928

How risky is gold compared to other assets? For most of the of the United States' history  gold's price was set by the government (given that the value of the US dollar was often pegged to gold). In this graphic, I have taken the annual price change of gold back to 1928 and compared it to the returns on stock, bonds and t-bills.

Since the early 1970s when the US completely abandoned the gold standard, gold's price changes has made it very volatile and if we look at the annualized compound return from 1976-2012 (gold 6.6%;  stocks 10.9%;  10-year bonds 8.1%;  3-month t-bills 5.1%). Gold returns was just little better than 3-month t-bills. However if we look at the annualized return for 1928-2012: gold's return of 5.3% beats t-bills at 3.6% and bonds at 5.1% but still underpreforms stock's return of 9.3%.

Gold Data from MeasuringWorth.org. Stock and treasury bonds data from Damodaran Online | Updated Data | Historical Returns on Stock Bonds and Bills - United States. CPI from Measuring Worth

Graphs created in OmniGraphSketcher then pasted into Illustrator

 

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Growth of GDP per Capita vs Stock Prices since 1871

RealStock_GDP-per-capita_Log-650x442.png

Comparing Real GDP per Capita growth to the real growth in S&P Composite (price only). However, the stock price series is adjusted for inflation using CPI-U while the GDP per Capita (from MesuringWorth.com) is adjusted with the GDP Deflator.

Annualized growth rate of since 1871:Real GDP per Capita = 2.0%Real stock price return = 1.9% compared to Real total return with dividends reinvested = 6.2%

Data from MeasuringWorth.com and IrrationalExuberance.com


Real Word Examples of Exponential Growth
4.50

Six real word examples of exponential growth in a Powerpoint slide show (3.7 MB) that includes 11 graphs of economic and financial data (linear and log scale). Data is from MeasuringWorth.orgYahoo Finance, and Irrational Exuberance. Links to the data sets are included in the file. Images can be printed (B&W or color) for handouts.

  • Real US GDP 1790-2012 (Linear & Log Graphs)
  • Real US Stock Prices 1871-2012 (Linear & Log Graphs)
  • General Electric Stock Price 1962-2013  (Linear & Log Graphs)
  • US Population 1790-2012 (Linear & Log Graphs)
  • Inflation Index 1774-2012 (Linear & Log Graphs) 
  • US GDP & Population 1790-2012 (Log Graph)

These graphs illustrate historical data series with constant growth rates and data series with changing growth rates over time. In addition, there is a example of adding/subtracting growth rates in log graph using US GDP, US Population & US GDP per person. 

*** A few of people have had difficulty downloading in Firefox, if the download link does not work, try to copying the link into another browser. ***

 
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Effect of Dividends Reinvested on US Stock Returns since 1871

Another version of my stock graph. Instead of the nominal price index from yesterday's post, I am comparing real price index to the real total return (price change with dividends reinvested) since 1871. Both series are adjusted for inflation. Annualized growth rate of since 1871: Real total return with dividends reinvested = 6.2%  Real stock price return = 1.9%

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