RETURNS OVER 20-YEAR PERIODS VARY SIGNIFICANTLY; …

RETURNS OVER 20-YEAR PERIODS VARY SIGNIFICANTLY; AFFECTED BY THE STARTING P/E RATIO

20-YEAR ROLLING STOCK MARKET RETURN (blue/left) & CHANGE IN P/E RATIO (red/right): 1919 - 2023

Rolling 20 Yr Change In S&P 500 (annual rate)

70

60

15%

50

40

10%

30

20

5%

10

-

0%

(10)

-5%

1919

1926

1933

1940

1947

1954

1961

1968

1975

1982

20-Yr Annualized Return (S&P 500 Total Return, Including Dividends)

20 Yr Stock Market Based Upon Starting P/E Ratio (1900-2023)

P/E10 At The Start Of The 20 Years

45

DECILE

1

2

3

4

5

6

7

8

9

10

30

25

20

15

10

5%

10%

15%

Annual Total Return Over 20 Years

2003

2010

(20)

2017

20 Year Periods Ending 1919 - 2023 (105 periods)

35

0%

1996

Change In P/E10 (Beginning to End)

40

5

1989

TOTAL RETURNS

S&P500

AVG

AVG

BY DECILE RANGE

DECILE

BEGIN

END

AVG

5.1%

6.8%

7.2%

7.6%

8.4%

9.6%

11.1%

12.0%

13.7%

15.4%

P/E

23.6

18.2

13.8

16.0

19.4

18.6

15.0

12.0

11.9

10.1

P/E

13.2

11.7

13.8

12.8

19.3

20.3

20.0

18.6

21.6

28.6

FROM

3.1%

6.4%

7.1%

7.3%

8.0%

8.9%

10.7%

11.4%

13.0%

14.0%

TO

6.1%

7.1%

7.3%

7.9%

8.8%

10.4%

11.4%

12.8%

14.0%

17.1%

20%

Note: P/E ratio based upon average 10-year real EPS (P/E10)

Copyright 2003-2024, Crestmont Research ()

Change In P/E Ratio (Beginning To End)

80

20%

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