Is the S&P 500 year-to-date return of nearly 30%, sustainable?

S&P 500 total return (dividends + price change)
2021 29.41
2020 18.40
2019 31.49

Since the S&P 500 was launched in 1926, the average annual return has been between 10% and 11%. Is the total return of the last three years sustainable?

According to the Buffet Indicator and the Shiller Index,  the market is significantly overvalued.

Nearly 90 years ago, John M. Keynes famously stated that markets can stay irrational longer than you can stay solvent.  Today, markets are irrational on the upside. These days, Keynes might state that markets can stay irrational long enough for investors to make more money than they ever did before.

Given that there is more money in circulation today and interest rates are lower than ever before, one could argue the markets are not irrational.

Many of our members have a 50-50 asset allocation with 50% in an exchange-traded fund tracking the S&P 500 and 50% in money or near-money. If investors simply maintained that asset allocation by rebalancing every time the market dropped by 5% or rose by 10%, they would have achieved the same result with half the fluctuations, that is, half the risk.

Feel free to call me (705-441-4566) if you want to review the above.

With the habits of the Monday Morning Program, luck hardly matters. Good luck!


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Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me