If You Had Invested $1 In Stocks In 1824, Then You'd Be Filthy Rich Right Now

In a new note to clients, BofA’s Michael Hartnett and his global equity strategy team provide some great US stock charts that go way back.

They highlight the three greatest bull markets in the history of U.S. equities: 1860-1872, 1920-1928 (right before the Great Depression), and 1982-1999 (right before the tech bubble burst).¬† Here’s the chart:

Large company stock returns since 1824

Photo: BofA Merrill Lynch

BofA writes that “$1 invested in US large company stocks in 1824 would be worth close to $3,642,000 with dividends¬†reinvested, illustrating the power of compounding.” So — depending on your time frame (188 years, maybe?) — stocks may be a good investment.

Wait, though.

Later in the report, BofA says that prices “adjusted for inflation illustrate a more nuanced picture” of returns:

Two good stats for the bears. First, the S&P 500 has had a negative real price return in nearly 1 out
of every 2 years since 1871. Second, equity prices in real terms last peaked in August 2000; after
prior secular tops in 1907, 1929 and 1968, stocks took 20-30 years to recover back to their old highs.

Check it out:

S&P 500 real returns since 1871

Photo: BofA Merrill Lynch

So, adjusted for inflation, your returns would be much more modest.

SEE ALSO: BlackRock: 3 Reasons Why The Rest Of The Year Will Be Rough For Investors

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