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Nice post and some interesting thoughts. However, if you make investement decisions for investment horizons of 5+ years, you should also have a look at inflation corrected data. While that doesn't help when you try to compare various investments, it sheds some interesting light on the absolute point of "increasing value" versus "increasing numbers".


Nice boxplot chart. If you plotted "expected average annual return" for the period instead of "expected return" for the period, the boxes could be graphed against the same axis allowing easy comparison.

tom brakke

Good post. FYI, the Leuthold Group has been producing histograms like the one you link to for probably twenty-five years, including using the year (or other appropriate time period) within the building blocks of the histogram. I don't know whether they came up with the approach or not, but they use it effectively to visualize the history of a number of investment variables.


Christian: I think the data is inflation-adjusted; the source said it is real total returns.

Kent: I thought about putting the 5-year and 10-year returns as equivalent annual returns rather than cumulative. For my purpose, I'd like to know if I'm doubling my money, etc. so this makes more sense to me.

Tom: Would love to attribute those histograms to whoever first used them. Thanks for the pointer.


Did you mean to have 2 graphs labeled 10 years?

Why are there outliers at 5 and 20, but not the two in between?


The two 10-year plots show the same data but with different axis scales, don't they? In each case the axis scale is the same as the adjacent plot.

Presumably there were no data points in the 10-year sample that met the criterion for being outliers (e.g. were further from the mean than a chosen multiple of the standard deviation).

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