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Bob Carey
Chief Market Strategist
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  Accentuate the Positive
Posted Under: Broader Stock Market
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View from the Observation Deck
  1. Today's blog post is yet another attempt at putting equity investing in its proper light. We still believe that U.S. equities represent one of the best avenues for wealth-building potential over time.
  2. From 1926 through 2017, the S&P 500 Index generated a positive total return in 68 of the 92 calendar years, or 73.91% of the time, according to Ibbotson Associates/Morningstar. The index posted a 10.16% average annual total return over that period. 
  3. Year-to-date through 8/28/18, the S&P 500 Index posted a total return of 9.75%. That equates to annualized return of 15.06%, according to Bloomberg. 
  4. Investors should take some solace in the fact that 17 of the 24 calendar years, or 70.83%, in which the S&P 500 generated a negative total return occurred prior to 1975, according to data from Ibbotson Associates/Morningstar.
  5. We believe that corporate earnings determine the direction of stock prices over time. 
  6. Bloomberg consensus earnings growth rate estimates for the S&P 500 Index for 2018, 2019 and 2020 were 23.58%, 11.47% and 10.05%, respectively, as of 8/24/18. 
This chart is for illustrative purposes only and not indicative of any actual investment. There can be no assurance that any of the projections cited will occur. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. Past performance is no guarantee of future results. The S&P 500 is a capitalization-weighted index comprised of 500 stocks (currently 505) used to measure large-cap U.S. stock market performance.

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Posted on Thursday, August 30, 2018 @ 12:54 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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