Stock Returns

Here’s an interesting table summarizing data from the Federal Reserve on comparative returns on stocks, T-bills and Treasury bonds from 1928 to 2008. What if you had put $100 a stock index like the Dow Jones in 1928? What would it be worth today?

What this illustrates is the power of compounding over a number of years. A nice gift from any parent or grandparent to a newborn child might be a small amount put in a stock index fund in trust for that child.

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