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The Greatest Chart of All Time

The Greatest Chart of All Time

August 22, 2023

I’m sitting on my couch late on a Sunday morning looking at LinkedIn and I just saw the greatest chart of all time.  Here it is:


Why Is This the Greatest Chart of All Time?


I saw this in a post from a guy named Ben Carlson.  He has a blog called, A Wealth of Common Sense and he’s an advisor with Ritholtz Wealth Management, LLC.  The title of his latest blog is, One Year Returns Don’t Matter.  This chart proves it.  Here’s what this chart shows.  The orange lines are the annual returns for the S&P 500 since 1980.  The blue line is the 30-year rolling average of returns.  A rolling average in this example means you take the returns for the previous 30 years, add the total then divide by 30 to get the average return for the 30 years.  Then you wash, rinse, repeat.  In another of Ben’s blog posts he says the worst 30 year return you would have gotten was 7.8%.  That’s what you would have gotten if you started investing in 1929 through 1958.  Just think of all the things that happened during that period.  The Great Depression, World War II, etc.  For the latest 30-year period through January of 2023, the return has been 9.8% per year.  Here’s what Ben said about the last 30 years:

The most recent 30 year period includes:  The Asian currency crisis, the dot-com crash, 9/11, the Iraq/Afghanistan wars, the Great Financial Crisis, the biggest global pandemic since 1918, the war in Ukraine and 9% inflation not to mention flash crashes, a few recessions, government shutdowns, trade wars, an insurrection, multiple impeachment hearings, 4 legitimate bear market crashes, 9 other stock market corrections and a whole bunch of other crazy and/or bad things I can’t think of right now.

Even with all that going on, the return on the S&P 500 averaged nearly 10% per year.  I’ll remind you of the rule of 72.  It says, take the number 72, divide it by a number, in this case 10, and the answer is the number of years it takes money to double.  This means your money would have doubled every 7 years.  I put these numbers in my HP 12C calculator and here’s what I came up with: 

$100,000 PV 30n 9.8i = $1,652,228.85

This Will Save You Time


With this information in hand, you are going to save a lot of time.  You won’t have to watch CNBC or any of the financial news channels.  You won’t have to look at your monthly statement from your 401k and investment accounts.  You won’t have to spend time worrying about what’s going to happen and what will the stock market do next year because you know it doesn’t matter.  Instead, you can spend your time doing things you like to do like riding your bike, learning Spanish, and playing the drums.  You can spend focused time with your wife and kids secure in the knowledge that everything is going to be okay.

You Still Need to Plan


Even though all your concerns about the stock market have been laid to rest, you still need to plan.  You need to protect your ability to earn an income.  You need to get your will and estate planning in place.  You’ll want to have a budget and cash available in case of an emergency.  If you are retiring or getting close to retirement, the strategy for creating a retirement income that lasts as long as you do requires additional planning.  I can write about that in another post.  There will be questions about Roth conversions and sequence of return risks that must be addressed.  How do you plan for a long-term care event?  Where do we hold our assets?  401ks, Roth IRAs, taxable accounts, etc.?

Don’t Worry, Be Happy!


Everybody knows that famous song by Bobby McFerrin.  With your financial plan in place, your emergency fund available, following your budget and you are properly insured against life’s inevitable downturns, just think how carefree your life can be.  Instead of worrying about the next ups and downs of the stock market, you can rest easy knowing over long periods of time, you can expect a return in the 8-12% range.  With that range of returns built into your financial plan, you will feel more confident about your financial future.  You are in control of your P.A.I.L., Protection, Asset Management, Income for Retirement and Leaving a Legacy.  Now you can spend your time focusing on the things that are important to you.  If you want any help with this or want to discuss your personal situation, reach out to me HERE.  As always, thanks for reading.  KB