The ICA Guide
The ICA Guide
The ICA Guide
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Fed raises interest rates<br />
six times<br />
57.3<br />
,180.6<br />
407.2<br />
,753.9<br />
Dow tops 4000, then 5000 —<br />
market “too high”<br />
61.7<br />
2,779.7<br />
450.1<br />
20,578.7<br />
Technology stocks stumble<br />
64.3<br />
3,247.9<br />
480.1<br />
24,560.6<br />
Chaos in Asian markets<br />
67.0<br />
4,142.7<br />
510.3<br />
31,881.2<br />
75.4<br />
5,008.2<br />
584.1<br />
39,193.5<br />
82.8<br />
5,748.5<br />
651.8<br />
45,682.2<br />
93.0<br />
5,875.5<br />
743.4<br />
47,435.2<br />
804.1<br />
45,258.6<br />
0.2 +30.6 +19.3 +29.8 +22.9 +16.6 +3.8 –4.6<br />
Global economic turmoil<br />
Fears of Y2K<br />
computer problems<br />
994 1995 1996 1997 1998 1999 2000 2001<br />
Internet bubble bursts<br />
Terrorist attacks in U.S.<br />
99.0<br />
5,507.5<br />
Corporate accounting scandals<br />
2002<br />
100.7<br />
4,616.9<br />
833.3<br />
38,709.1<br />
–14.5<br />
U.S. invades Iraq<br />
2003<br />
102.2<br />
5,713.5<br />
864.3<br />
48,891.6<br />
+26.3<br />
Oil prices soar<br />
2004<br />
103.0<br />
6,163.0<br />
887.4<br />
53,674.5<br />
+9.8<br />
Hurricanes devastate<br />
southern U.S.<br />
Not drawn to scale<br />
This chart is based on a logarithmic scale, so it<br />
uses smaller and smaller increments for larger<br />
numbers. If the scale were arithmetic — with, say,<br />
one inch representing every $10,000 — the dark<br />
blue area (indicating results if dividends had been<br />
excluded) would be 52 feet tall, which is about as<br />
tall as most five-story buildings. <strong>The</strong> lighter blue<br />
section, which shows how the investment would<br />
have done if dividends had been reinvested in<br />
more shares, would be 531 feet tall — more than<br />
three times the height of the Statue of Liberty.<br />
This illustrates the difference reinvesting your<br />
dividends can make.<br />
2005<br />
136.3<br />
6,446.5<br />
1,196.3<br />
57,361.4<br />
+6.9<br />
Dow Jones tops<br />
12000 for first time<br />
151 ft.<br />
2006<br />
152.1<br />
7,313.2<br />
1,364.6<br />
66,504.4<br />
+15.9<br />
Subprime credit crisis<br />
<strong>ICA</strong><br />
(dividends<br />
reinvested)<br />
2007<br />
144.0<br />
7,601.9<br />
1,319.3<br />
70,456.8<br />
+5.9<br />
U.S. recession<br />
2008<br />
156.9<br />
4,835.7<br />
1,466.7<br />
45,983.8<br />
–34.7<br />
U.S. unemployment tops 10%<br />
<strong>ICA</strong><br />
(dividends<br />
excluded)<br />
531 ft. 52 ft.<br />
2009<br />
131.5<br />
5,986.9<br />
1,264.7<br />
58,481.1<br />
+27.2<br />
Gulf of Mexico oil spill<br />
2010<br />
129.2<br />
6,496.8<br />
1,272.4<br />
64,830.6<br />
+10.9<br />
European sovereign debt crisis<br />
2011<br />
133.8<br />
6,249.9<br />
1,345.5<br />
63,692.5<br />
–1.8<br />
<strong>ICA</strong> with dividends<br />
reinvested<br />
$63,692,508 1<br />
Average of<br />
11.9% a year<br />
Stock market with<br />
dividends reinvested<br />
$24,974,688<br />
10.5% a year<br />
<strong>ICA</strong> with dividends<br />
excluded<br />
$6,249,919 2<br />
Average of<br />
8.6% a year<br />
Stock market with<br />
dividends excluded<br />
$1,245,149<br />
Average of<br />
6.4% a year<br />
Consumer Price<br />
Index (Inflation)<br />
$170,964<br />
Average of<br />
3.7% a year<br />
Original investment<br />
$10,000<br />
Average<br />
annual<br />
total<br />
return for<br />
78 years:<br />
+11.9%