2019 Results for CPI, Stocks, Bonds - Calculators Updated

2019 Results for CPI, Stocks, Bonds - Calculators Updated

Our calculators have been updated with 2019 data for CPI, S&P 500, bond, and cash returns.

2019 raw numbers:

  • The CPI (consumer price index) increased by 1.8%, which is below the Fed's goal of 2% and relatively tame. This is good news for the economy, or at least the Fed. The CPI tracks inflation, which measures how prices rise slowly over the years.  However the CPI-U (urban consumer price index), which our calculators use, doesn't do an adequate job of capturing the reality of rising costs housing, health care or education.
  • The S&P 500 had a 31.22% return, the largest return since 2013, and this year continues the longest economic expansion and bull market in recent US history.
  • The 90-day T bill had a 1.55% return (which we consider as the cash return in our retirement calculators).
  • 10 year Treasury Bonds had a 9.64% return.

In early 2019 stocks rebounded off the lows at the beginning of the year. The past 3 years the S&P 500 returned +21.6%, -4.2% and +31.22% (a compound annual growth rate of 15.2%). This goes to show how much the market fluctuates, and why long term investors who set it and forget it get the best sleep.  

Bond returns were the best they have been since 2014 due to the small rate cuts the Fed made. When bond rates go down, existing bonds with higher rates become more valuable.  

All the main asset categories had positive returns for the year. 2019 was one of those years you really couldn't bet wrong, and being "in the market" felt great. We may not see another year like this for awhile, but nobody knows where it is all going.

For people with investments in a mix of stocks and bonds, rebalancing to match their desired asset allocation would be in order. Stocks gained a lot more than bonds in 2019. This caused portfolios to tilt towards stocks more than desired. This goes without saying that rebalancing should be a regular task as part of checking up on net worth.

Our retirement calculators use backtesting based on historical data since 1928. 2019 was such a great year it moved the average return up a little. When running our Retirement Withdrawal Calculator with default inputs the average resulting balance went up by $210k (+4.1%). The default settings are to retire with $1M (invested 70% stocks, 30% bonds), with an initial withdrawal amount of $40,000 that gets adjusted by the CPI every year, and to let it run for 30 years. Still the simulation high, low, % above zero and % below zero stayed the same. In terms of overall simulations, 2019's gains wipe out 2018's losses and then some, putting us above 2017 by a smidge.

  • Average Resulting Balance    $5.30M (2017)
  • Average Resulting Balance    $5.13M (2018)
  • Average Resulting Balance    $5.34M (2019 update)

Other results are exactly the same:

  • Simulations Ending Above Zero (money left over) 98.9%
  • Simulations Ending Below Zero (money ran out early) 1.1%
  • Simulation Low    -$205,544
  • Simulation High    $16.08M

This is yet another piece of evidence that supports the idea of long term investing.

With this year's data update our retirement calculators now compute a few new values: 

  • The median return (which tells a lot more than the average since returns are skewed to the low side).
  • The 25th and 75th percentiles.
  • A histogram bar chart showing how the returns are grouped, which clearly shows for most simulations returns are skewed to the lower end.
  • A new goal input box and calculation of how many simulations exceed that number. E.g. what percent of simulations say I die rich, die broke, maintain my balance.
  • Thank you to users who wrote in with suggestions and feedback on our calculators!
  • For financial advisors in the UK interested in a embedded or customized version of our calculators, we now support pounds (£) and compute returns using UK Stocks (FTSE All Shares Total Return), UK Bonds (Gilt Index), UK Cash Returns (Bank of London), and UK inflation (cost of living index).

Associated Calculators:

Data Sources:


The post 2019 Results for CPI, Stocks, Bonds - Calculators Updated is part of a series on personal finances and financial literacy published at Wealth Meta. This entry was posted in Announcements
Leave a comment

The Wealth Meta community is based on authentic and insightful discussions. The best comments are when people share their questions, goals, insights, and encouragement. Trolling is not tolerated!

Markdown syntax supported. Check out the Markdown help guide here.