Not all returns are equalOctober 22, 2018
During my recent European trip at a dinner with friends, someone asked me if the market was up that day. It’s a question I often get from anyone who knows that I’m an investment advisor and a stock-picker. I often disappoint them saying that I don’t know because I haven’t looked.
Are all up days or years in the stock market the same, though? From the outside, a gain of 10% of the entire stock market’s performance seems to be identical with a 10% increase in price, and thus good news for stockholders. In actual fact, not all 10% annual returns are equal.