DJIA – Historical Performance of the Dow Jones Industrial Average

Given the inadequacy of this work in human terms and the peace of mind, I thought I should look at how the DJIA (Dow Jones Industrial Average) has worked over the years 30 has passed, since 1975. During this time, from a significant return of 38% in 1975 to a (-17%) fall in 1977. From 1975 to 2006, there were 23 positive years and 9 bad years. If you follow the simple average of annual returns during this period, you may increase to 10.83%

Does that mean you can earn 10.83% per year by investing in DJIA? NO Some years you earn that or more than others you earn less and you may lose money. Returning on your return is not as easy as taking averages. Let me give you an example: Two people who have been investing their money in different financial instruments for 5 years. The first investor pays 8% per annum, the second investor 15%, (-3%), 18%, (-12%), and 22% for five years. These two sponsors have earned a modest average of 8% for 5 years, but are they the same amount?

Joiner 1:

Initial investment $ 10,000.00

After First Year 8% Must receive $ 10,800.00

After Year Two 8% Earn $ 11,664.00

After Third Year 8% Earn $ 12,597.12

After Year Eight 8% Earn $ 13,604.89

After Year Five 8% Earnings $ 14,693.28

Funding 2:

Initial investment $ 10,000.00

After First Year 15% Earn $ 11,500.00

After Second Year (-3%) Loss of $ 11,155.00

After Third Year 18% Earn $ 13,162.90

After Year Four (-12%) Loss $ 11,583.35

After Year Five 22% Earnings $ 14,131.69

As you can see, the investor earned almost $ 562.00 more than we counted on the whole simple average year. However, in real returns, the first investor was given 5.5% over five years of investment. I will bring this example to illustrate the value of minimizing negative feedback. The best way to do this is to differentiate, not only the animal species, but the species types too. Finally, keep in mind that historical information does not mean that the future will be the same, but it can be used as a starting point for predicting an accurate return.

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