Facts That Make A Difference
1. RISK? -"The models suggested that the risk (on CDO’s and Derivatives) was so remote that the fees were almost free money. Just put it on your books and enjoy the money." (Source: Tom Savage, President, AIG's Financial Products).
2. BORDER-LINE- Nearly 2 out of every 3 US residents (197 million people) live within 100 miles of of U.S. land or coastal borders (Source: U.S. Census Bureau).
3. ROTTEN YEAR - The S&P 500 lost 37.0% (total return) during 2008, its worst calendar year performance since the stock index declined 43.3% in 1931 or 77 years ago. Its loss of 21.9% (total return) in the 4th quarter of 2008 was the 7th worst quarterly loss ever for the S&P 500 and its poorest quarterly showing in 21 years since the 4th quarter 1987 produced a loss of 22.5%.(Source: Standard & Poor’s).
4. AFTERWARDS - In the 20 years following 1931 (i.e., 1932-51), the S&P 500 gained +11.7% per year on a total return basis. In the 20years following the 4th quarter 1987 (i.e., 1988-2007), the S&P 500 gained +11.8% per year on a total return basis (source: Standard & Poor’s).
5. FIFTY-YEAR AVERAGE RETURN - The average annual total return for the S&P 500 over the last half-century (i.e., the 50-years from 1959-2008) is +9.2% per year (source: Standard & Poor’s). Note: the Standard & Poor’s 500 index is an unmanaged group of stocks. One cannot invest directly in this index and past performance is no guaranty of future results.
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