You’re right. The returns were higher in the later years. I have no idea what rate of return they were claiming in the 50s and 60s. I was too young to care, but my guess is, they were probably using a lower number. Mortgage interest rates were much lower back then too. I was in the service in the latter part of the 60’s and I invested in savings bonds. I think the rate of return was something like 2.5%.
Ahh, I missed your post, JimRob.
Being a history guy, when someone says “long-term, I think the “real long term”, heh. Twenty-five years is a blip on the radar screen :)
I took an estate planning course while in college in the 1960s, and I seem to recall the instructors talking about 7% annual return as being a reasonable and safe “target” for your investments.
I don’t think you can directly look at the DOW over these years and calculate the annual return of the component stocks. The DOW is an index number based on the daily sales price of the component stocks. It doesn’t really reflect the stock’s earnings (dividends). It just reflects stock appreciation. The earnings re-invested act like compound interest and can build the total quite quickly... over time.