{"id":821,"date":"2006-12-31T01:09:44","date_gmt":"2006-12-31T08:09:44","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=821"},"modified":"2007-01-24T22:50:54","modified_gmt":"2007-01-25T05:50:54","slug":"the-s-p-is-up-over-16-in-2006","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/821\/the-s-p-is-up-over-16-in-2006\/","title":{"rendered":"The S & P Is Up Over 16% In 2006!"},"content":{"rendered":"

Over the last half century or so the S & P has averaged, give or take, about 8% growth annually. Pretty impressive. A lot of folks are very impressed, especially those who’ve invested into vehicles tied to the S & P index. They did better than ok this year, don’t you think? Twice the average for the last half century ain’t bad by anyone’s calculations. As a matter of fact let’s say the S & P annual growth rate for the five year period) averaged 10% annually, which is still 25% better than the average since Eisenhower was president. For those already retired and receiving income from investment grade insurance vehicles, many of which are tied directly to that index, 2006 has been a banner year. If you’re wondering why the grandkids made out like bandits at Christmas this year, that could very well be the answer.<\/p>\n

For the same period of time let’s have two investors, one in the S & P, the other in real estate. They both have a hundred grand to invest. The real estate guy is at a little disadvantage though because he’ll need to hold some of his cash back as reserves. The S & P investor can afford to put his entire hundred grand into his investment.<\/p>\n

So the real estate guy finds three duplexes for $200k apiece. (Remember, even though it’s San Diego, it’s 2001.) He puts 10% down on each one. His total investment including closing costs was about $75k. He put the remaining $25k in the bank as a cash reserve account. The duplexes all provided about $100 monthly positive cash flow, though our investor was just hoping they’d at least break even.<\/p>\n

Note: My office structured transactions like this a few times a month back then, month in and month out.<\/em><\/p>\n

Even though the real estate appreciation rate was three times what we’re assigning to the S & P for these five years, we’re going to limit it for this example to 10% a year for the real estate also. This results in a value of roughly $254k half way through Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Over the last half century or so the S & P has averaged, give or take, about 8% growth annually. Pretty impressive. A lot of folks are very impressed, especially those who’ve invested into vehicles tied to the S & P index. They did better than ok this year, don’t you think? Twice the average […]<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-821","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":58,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/58\/down-but-not-for-the-count\/","url_meta":{"origin":821,"position":0},"title":"Down but not for the count…","author":"Odysseus","date":"March 3, 2006","format":false,"excerpt":"From The BloodhoundRealty.com Market-Basket of Homes for February: \"Home values are down for the second month in a row in the February 2006 BloodhoundRealty.com Market-Basket of Homes. Average sales prices dropped by 1.14%, just under $3,000, from $263,638 to $260,645. The weakness was felt mostly at the higher end of\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":302,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/302\/august-2006-market-basket-of-homes-values-up-25-on-stronger-sales\/","url_meta":{"origin":821,"position":1},"title":"August 2006 Market-Basket of Homes: Values up .25% on stronger sales . . .","author":"Greg Swann","date":"September 8, 2006","format":false,"excerpt":"Is the Metropolitan Phoenix real estate market starting to recover? Too soon to say, but prices edged up slightly on sales that were stronger -- even if they are still slow -- in the August edition of the BloodhoundRealty.com Market-Basket of Homes. Average prices for Market Basket homes in August\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":601,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/601\/october-2006-bloodhoundrealtycom-market-basket-of-homes-values-down-407-on-normal-sales\/","url_meta":{"origin":821,"position":2},"title":"October 2006 BloodhoundRealty.com Market Basket of Homes: Values down 4.07% on normal sales . . .","author":"Greg Swann","date":"November 4, 2006","format":false,"excerpt":"The Phoenix-area real estate market's three-month experiment with stasis came to an abrupt end in October: Although sales levels were normal, as compared with October 2003, the most-recent October before the real estate boom, both asking and selling prices dropped precipitously among the homes tracked in the October 2006 edition\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":512,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/512\/august-2006-bloodhoundrealtycom-market-basket-of-homes-values-down-015-on-normal-sales\/","url_meta":{"origin":821,"position":3},"title":"September 2006 BloodhoundRealty.com Market-Basket of Homes: Values down 0.15% on normal sales . . .","author":"Greg Swann","date":"October 5, 2006","format":false,"excerpt":"The Phoenix-area's real estate market seems to be continuing its slow trek back to normalcy. Home prices were essentially unchanged on a fairly strong volume of sales in the September edition of the BloodhoundRealty.com Market-Basket of Homes. Average prices for Market Basket homes in September were down 0.15%, compared to\u2026","rel":"","context":"In "Marketing"","block_context":{"text":"Marketing","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/marketing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":63,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/63\/market-basket-of-homes-values-up-197-in-march\/","url_meta":{"origin":821,"position":4},"title":"Market-Basket of Homes: Values up 1.97% in March","author":"Odysseus","date":"April 5, 2006","format":false,"excerpt":"Home values were up a substantial 1.97% in the March 2006 BloodhoundRealty.com Market-Basket of Homes. Average sales prices were up more than $5,000, from $260,645 in February to $265,778 in March. Values are still down slightly more than $4,000 from the December 2004 high of $269,875. Market-Basket homes spent an\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9879,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/9879\/investment-strategies-high-volatility-markets\/","url_meta":{"origin":821,"position":5},"title":"Investment Strategies: High Volatility Markets","author":"Cooksquared","date":"September 28, 2009","format":false,"excerpt":"As I begin analyzing a variety of markets, I thought I would quickly share some tips for investment strategy consideration. In thinking about an investment strategy it is important to consider the volatility of the market you are investing in. 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