Could you use 5-year average growth rates of 16.58% to 36.61%??
In the interests of full disclosure, I must say that the rates which I quoted in the subject line are reduced substantially by brokerage commissions.
I have been in contact with an analyst of stocks who has been investing for a number of years, in assocation with a partner.
The growth rate of their usual basket of about 25 stocks (they owned 21 recently) owned directly is as follows:
1992 ... 50.1%
1993 ... 77.8%
1994 ..... 1.5%
1995 ... 13.2%
1996 ... 37.4%
1997 ... 53.2%
1998 ..... 0.5%
1999 ..... 9.2%
2000 . -17.4%
2001 ... 64.8%
2002 ... 47.3%
2003 ... 68.4%
2004 ..... 6.0%
2005 ... 24.3%
2006 ..... 9.1%
2007 . -15.5%
For an illustration of the reasons that people skilled in the equity investment business say ...
... that one should be invested in this type of investment for at least five years, ...
... imagine how you'd have been feeling at the end of 2000 had you invested in their system at the beginning of 1998!!
But - by the end of 2002, the 5 year average growth rate had recovered to 16.58%, as they more than doubled their investment value in the next two years!
The 5 year average growth rate ending in:
1997 ... 36.61% high
2000 ... 16.58% low
2003 ... 34.46%
2004 ... 33.82%
2005 ... 42.16%
2006 ... 31.02%
2007 ... 18.46%, the largest variation being slightly over 20%.
The 10 year average growth rate ending in:
2003 ... 27.81%
2004 ... 28.22%
2005 ... 29.37% high
2006 ... 26.54%
2007 ... 19.67% low, the largest variation being slightly under 10%.
Note that there is much wider variation among the 5-year numbers given than among the 10 year list. The longer one lets one's investment run in a varied list of stocks, i.e. well diversified, the lower variation, or smoother, the average rate of growth.
These gentlemen usually plan to buy stocks priced under $25.00, for they feel that there is a better possibility of higher percentage of growth in a $20.00 stock than in a $50.00 or a $100.00 stock.
I can't tell you the list of stocks that they own now.
I've received their reasonably current newsletter that tells those details as free handouts at meetings on some occasions in the past.
They used to sell their quarterly newsletter for about $250.00 per year ... now it costs $500.00, with a limit of 1,000 subscribers (and have some openings).
I'm sort of looking for about 4 other persons willing to kick in $100.00 each that I'll add $100.00 to, in order to subscribe.
As one looks at their track record, this seems to be an advantageous time!
There are only a few pages in the newsletter ... and updates come by email on various occasions, usually when they make a change in the portfolio.
They have had at least one of their holdings taken over in almost every year, sometimes several - which usually offers a premium price over the market price at the time. Such offers usually occur for undervalued stocks.
Sometimes they carry a stock for a few years, waiting to achieve their target price. That is, one would not be buying and selling the whole 20 - 25 stocks each year.
Good wishes for increasingly skillful management of your income and assets.