I recently read a paper from Jeremy Siegel and Jeremy Schwartz titled “The Long-term Returns on the Original S&P 500 Firms�.

In this paper the authors calculate the total returns of a buy and hold of the original 500 companies in 1957. They found that on average 20 stocks annually have been added and deleted from the index (without considering that a merger of two S&P 500 companies is an addition to the index) since 1957. The authors also used three methods of calculating the returns:

 

Submitted: Jul 22, 2008    Views: 183    Comments: 2    Likes: 1   


View Article: http://www.thediv-net.com/2008/07/ultimate-passive-investment-strat...


Related Articles:



1

Email this story Email to someone | Print Story Print Content | Add to reading list

Comments Received:

Sam Cass
Sam_Cass

So which of the three portfolios performed the best? I've heard that spin-offs tend to perform well so selling them as specified in the Survivors Portfolio doesn't match that piece of advice.

Posted: Jul 22, 2008

Author/Submitter Response:

Sam,

The answer is in the article that I posted.

Arnold
(Unregistered)

Typical buy and hold. But if you buy at the wrong time you could be out of luck. Think Nasdaq in 2001. Even if you bought the top 20 companies you'd still be deep in the red.

Posted: Jul 22, 2008

Author/Submitter Response:

Yes, but Nasdaq in 2000 was more of a tech sector index, whereas S&P 500 is a more diversified index.



Add Your Comments:

Your Name:

Spam protection control:


Financial products of all nature bear inherent risks and this website is not a financial advisory service; it is a forum for users to share and to compare notes and observations on financial publications. The website provides, free of charge, the technical and logistical apparatus and the medium for users to share and to publish financial information and to comment on publications. As such, the website’s operator can not and does not take responsibility for information, observations or opinions of any sort or nature provided by third parties with whom it is not affiliated who use the website to publish, to comment or as a means of solicitation. Users are specifically warned against following any advice related to specific instruments, including, but not limited to, equity securities, that may be provided by other users directly on this site or on web pages to which other users have provided links on this site. BestCashCow.com can not and does not check or verify the qualifications and credentials of users who publish or comment on this site or on linked pages. Users should seek personalized advice from qualified professionals regarding all personal financial issues and evaluate the risks and applicability to their own circumstances of each financial product discussed regardless of who the publisher is or purports to be. Should you, through your use of this site, identify an individual or organization purporting to offer personalized advice, you bear all responsibility to ensure that the individual or organization has the qualifications that they may represent on the website, and that their advice is appropriate for your circumstances. On certain webpages, BestCashCow.com provides information related to rates on US-based savings accounts, CDs, short-term government bonds, and other US cash equivalent securities, also free of charge to internet users for their independent use. The accuracy of this information is not guaranteed, and the information, like all other information on this website, should not be construed to provide investment advice, nor to endorse a financial product of any sort.

© 2007 BestCashCow.com, LLC. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy.