No one would deny that 2017 was a banner year for the markets … at the end of the year, all equity indices were near their all-time highs. Even the WSMSI (Working Capital Model Selected Income Index) had a capital growth number close to 12%.

But, let’s go through the promotional banners on Wall Street and look at the long-term numbers, let’s say this century so far …

You will recall that the period from 1999 to 2009 was dubbed “The Depressing Decade” by a Wall Street that simply couldn’t cope with the idea that the “crash market” (collectively) might actually roll back over such a long period of time. hour.

Has the “bull market” that evolved from the sad decade really produced the kind of gains you’ve been hearing about?

· From 1999 to 2009, the NASDAQ (home to long-standing “FANG” companies) fell by a whopping 34%. From 1999 to 2017, it was the worst performing of all the indices, with an increase of just 71%, or an average of less than 3% compounded, per year. So even the spectacular 160% market value gain since 2009 has not produced a spectacular long-term return.

From 1999 to 2009, the S&P 500 (although less speculative than the NASDAQ in general) lost a terrifying 39% of its value. Recovering faster than the NASDAQ, the S&P has gained roughly 94% in market value over the past 18 years, or an average of less than 4% compounded annually. So there’s not much to celebrate at the S&P either … for the long-term investor.

From 1999 to 2017, the highest-quality content DJIA suffered less than the other indices during the dismal decade, losing less than 1% per year, on average. But its overall 18-year performance of 115% market value growth averaged less than 5% per year. It reflects higher quality content, yes, but overall it is not that impressive.

So what about an income purpose investing approach over the same two time periods?

From 1999 through 2017, a $ 100,000 portfolio of closed income funds (CEF) paying approximately 7% annually, compounded annually, would have increased the capital invested to approximately $ 340,000 by the end of 2017 … a 240% gain in Working Capital, and almost three times the long-term average profit of the three capital averages.

During the same depressing decade, a $ 100,000 portfolio of income CEF that pays 7%, and is compounded annually, would have increased investment capital by about 111% (10% annually).

Keep in mind that the average yearly profit of about 13% is based on yearly profit reinvestment instead of monthly … so it would actually be even higher. Hmmm, kinda makes you wonder, doesn’t it?

Now some what if:

What if you lived off your income or portfolio growth anytime before mid-2010?

· What if you lived on 4% of your portfolio “growth” or “total return” before the end of 1999, how much was left when the recovery began in 2010?

What if we don’t get enough more years of double-digit market growth for the stock markets to catch up with the income illustration above?

· What if the market does not produce a “total return” greater than your spending needs forever?

What if your portfolio contained enough securities for income purposes to cover your expenses, combined with equities of a higher quality than those contained in the Dow?

What if the stock market corrects again this year?

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