Mar 10, 2021

Question of the Day: What has been the [geometric] average return for the stock market over the past 50 years [1970-2020]?

Answer: 10.65%

Here's the chart:

Questions:

  1. Do you think that putting your money in a savings account will earn you a higher or lower return than an investment in the stock market? Why?
  2. Your friend says that the stock market is rigged and most people lose money there. Would you agree or disagree with him?
  3. Is it fair to assume that the stock market will return about 10% a year in the future? Why or why not?

Advanced: 

  1. Reviewing the NYU data set and looking at the past 50 years, what percentage of years did the S&P 500 have a positive return? 
  2. In the years that the S&P500 had a loss, how did the 10 Year Treasury bond investment perform? How would you describe the purpose of a bond investment since it is often expected to have lower returns than stocks?

Here's the ready-to-go slides that you can use in your classroom!

 

Behind the Numbers (NYU data set):

This NYU data set is a great one for math teachers or if you want to teach spreadsheet skills and have students calculate means, medians, percentages and also get a feel for how different investments perform over long periods of time. 

 

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For those students who think they can time the market and know when to jump in and jump out, humble them with this investing arcade game, STAX!

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About the Author

Mason Butts

After graduating from UCLA with a Master's in Education, Mason spent 5 years as a science educator in a South Los Angeles public high school. He is committed to supporting the holistic growth of all students and empowering them to live a life of relational, academic, and financial success. Now settled in the Bay Area, Mason enjoys facilitating professional developments and partnering with educators as they prepare students for a bright financial future. When Mason is not building curriculum or planning a training, he can be found cycling, trying new foods, and exploring the outdoors.

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