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There were others I left out that were around with similar results.
The Investment Company of America- This goes back to 1934.
The Income Fund of America- Went back to 1974
The Growth Fund of America-Went back to 1974
The Balanced Fund of America- Went back to 1976
John
------------------ Reply Separator --------------------
Originally From: John Cappello <jvc689@xxxxxxx>
Subject: [RT] P/E inflation and the tenuous relationship between E
and P
Date: 09/06/2002 09:21pm
Dear Gary,
The Washington Mutual Investors Fund was one of the few around at
that time though I am sure there may be others...I had no reason to
do an active search. Plus do not forget I never disagreed with your
basic P/E premise because it would be like disagreeing with myself.
Below are data;
1/1/70 to 12/31/79 $100,000 to ending value of $208,424-$50,000 taken
out over 10 years = $158,424. Sorry for the slight miscalculation
done from memory. This was the worst 10 year period.
It just got better each succeeding rolling 10 year period.
Annual return between rolling periods went from a low of 7.62% to a
high of 18.89%.
Once you got past 1972 each rolling 10 year period improved overall
to the point one could actually withdraw more than 5% of investment
and still retain a tidy sum..
The best 10 year period which included the 70s was :
1/10/75 to 12/31/84 yielded ending value of $509,044- $50,000 =
$459,044
In that time frame as well as the majority of the others, one could
have easily given himself a pay raise each year.
Thanks for your cordiality and your fine research.
Sincerely,
John
------------------ Reply Separator --------------------
Originally From: "Gary Funck" <gary@xxxxxxxxxxxx>
Subject: RE: [RT] P/E inflation and the tenuous relationship between
E and P
Date: 09/06/2002 04:49pm
> -----Original Message-----
> From: John Cappello [mailto:jvc689@xxxxxxx]
> Sent: Friday, September 06, 2002 4:12 PM
> To: Gary Funck; Realtraders@xxxxxxxxxxxx Com
> Subject: [RT] P/E inflation and the tenuous relationship between E
and P
>
>
> Dear Gary,
>
> I appreciate your response and simply believe it is not a cut and
dry
> logic issue.We are also comparing apples to oranges when you compare
> Schiller data to American Fund Group data which I have in hand.I
make
> no comparison of any other fund group but believe most financial
> planners would lean toward the oldest and biggest and best managed
> funds. 5% annual withdrawal and still having close to double your
> money is not bad.
John, I agree that this is really an abstract debate. I'm curious
though,
which American Fund were you using as the comparison base line? I did
a
spreadsheet calculation, which says that to double your money in 10
years,
the basic appreciation rate was 7.18%. With taking 5% out every year,
the
total return would have to move up 12.24% per year in order to
achieve a
double in the price. That's very good when you consider the S&P price
total
return was 4.78%/year in the 1970's.
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