The Dow finished 2012 up 7.3%. Over the last 12 years you’ve gotten an average annual return of 2.2% per year in the stock market. Considering inflation has averaged over 5% per year and Wall Street syphons off 2% per year in fees, you may not have become rich. Bankers, politicians, and media pundits have the yachts. You’re left with your dinghy in your hand. The expected returns over the next ten years are not going to be any better. But that’s OK. Bennie, Obama, and the Congress critters will stimulate us to prosperity. Trust Wall Street and CNBC. Stocks for the long run are the way to go. Jim Cramer told me so.
Today’s chart provides some perspective on 2012′s stock market performance. Today’s chart illustrates each calendar year performance (dark blue columns) of the Dow since 1950. These calendar year performances have varied from a maximum of 44% back in 1954 to a minimum of -33.8% in 2008 with the overall average since 1950 (gray horizontal line) coming in at 8.1%. So how does the Dow’s performance in 2012 compare? The Dow’s performance for 2012 (gray column) is slightly below the 1950 to present average. However, it is worth noting that this year’s performance does compare favorably to the 2000 to present calendar year average which comes in at a meager 2.2%.