Vol. August 2023 – Long-Term Capital Fund Factsheet

In the Aug 1929 issue of leading US magazine Ladies’ Home Journal, General Electric
Executive John Raskob stated that by putting just US$15 monthly into stocks, investors could expect
their wealth to grow to $80,000 over the next 20 years (+24% p.a). Raskob’s advice right before the
Great Depression was denounced for years. But is that verdict fair? Our answer is decidedly no. In
reality – if you had followed the advice to patiently put $15 a month into stocks, by 1949 the
stock portfolio would have accumulated almost $9,000 (a return of 6.2% p.a.). After 30 years the
portfolio would have grown to over $60,000 (+8.7% annualized). Although these returns were not as
high as Raskob had projected, the total return of the stock portfolio was more than 3 times the
bond return.