Median v average returns.

[Bubblegun]

Is this a thing or nothing to think about?
It has been going around my head for ages.and I know, everyone wants things to look great when we are investing, but I am wondering if anyone has found any information on the median returns, NOT AVERAGE on the S&P 500. You see, we all want to think the average salary is good but it's not really, when we actually look at the median salary.

EG the Average salary is £35,000 v the median salary which is £29,000
The average life expectancy 81 years v average men being 79& women being 83. So in this case women squew the figires for men. The average isn't really telling men a clear picture.(especially when it comes to quality of life in the 70s.
Example 2
Savings Average in the US is $175,000 v Median is $11,700 2018.
https://mishtalk.com/economics/shocking ... d-savings/

So i was wondering if anyone is aware of the median returns.

Thanks in advance.

[Deep Blue]

You are talking about sub dividing the returns into a set of discreet time periods (annual?) and then taking the median of those rather than the mean? Not 100% what you’re trying the get at?

[Tsumitate Wrestler]

Median -> 10.53%
Average -> 7.69%
Min->-47.07%
Max->46.59%

(Data from Here->https://www.macrotrends.net/2526/sp-500 ... al-returns)
(Google Sheets function (=MEDIAN)

[Bubblegun]

You are talking about sub dividing the returns into a set of discreet time periods (annual?) and then taking the median of those rather than the mean? Not 100% what you’re trying the get at?

I would be thinking of the annual and the long-term. Mainly because "everyone" on YouTube, financial advisors says "Average", all the time, and I thought that the average is often tilted towards the higher numbers.Especially when financial services are concerned. (call me a little jaded from experience when it comes to financial services). Overpromise, underdeliver, and then think of some stock market crash to blame it all on, or some regulation. Because they prattle on about "returns" all the time and never really explain the consequences of the fund's charges. Maybe I should change my question to what is the average return of an ISA or NISA fund?... Don't get me wrong I am happy with my current funds but i just wondered if there was a difference between the "average v median" in our world of investing.

[Bubblegun]

Median -> 10.53%
Average -> 7.69%
Min->-47.07%
Max->46.59%

(Data from Here->https://www.macrotrends.net/2526/sp-500 ... al-returns)
(Google Sheets function (=MEDIAN)

S&P500 Annual % Change vs. Year.png

Ok, this is interesting. Thank you. I wonder why the average return is lover than the median...I always thought the averages were higher than the medians as it strips out those huge outliers.

[Deep Blue]

It just depends on the distribution of the returns. If there is a larger number of heavily negative than heavily positive years it will skew the distribution and result in the mean average lower than the median.

[captainspoke]

One of the biggest skews is when there's some figure for the average US person's retirement savings (investments), and then they give the median.

A quick stat from the net: "The average net worth of Americans aged 65 to 74 hovers around $1.2 million. The median net worth is lower, at $164,000."

[Bubblegun]

One of the biggest skews is when there's some figure for the average US person's retirement savings (investments), and then they give the median.

A quick stat from the net: "The average net worth of Americans aged 65 to 74 hovers around $1.2 million. The median net worth is lower, at $164,000."

Well that’s why I was wondering if the returns we are being told by ALL the YouTubers and marketing is “average” or is there a “median”. It could be nothing but it’s good to know and understand.
As you mention the average in savings is very different from the median. Frighteningly so!
I also do have a little bug bear when all the YouTubers point out Mr a a computer analyst save 1000 dollars a month or an accountant who save so much a month they aren’t now average.
The median saver according to Google in the UK saves £180 or ¥32000 or $213 a month. But the average is £450. Or ¥81000 or $540. Wildly different! Certainly not your median worker/average worker.
We can also do this with life expectancy and how they say we are ALL living longer, they state an age, but it is heavily skewed towards the women because women generally outlive men. But nearly all of them fail to talk about health. So I am wondering if all these YouTube channels, are cherry picking? Naturally they have a vested interest in trying to make it appear reachable which it is if your in your early 20s maybe not so for the median worker in their 40s 50s.

Anyways, it maybe be nothing but it was bothering me,was there an average return v median return. Maybe there isn’t . Here is another one that’s scared the bejesus out of me. As a general rule of thumb, you need 20 – 25 times your retirement expenses. So, if you spend £30,000 per year, you'll need £600,000 – £750,000 in pensions, investments and savings to be able to retire. Joe median saver won’t get close to that.(especially if they are expected to buy a house, have kids, save for college for the kids) just seems like a mountain to climb for us oldies. LoL

And for Japan not everyone is a professor at a university.

[RetireJapan]

As a general rule of thumb, you need 20 – 25 times your retirement expenses. So, if you spend £30,000 per year, you'll need £600,000 – £750,000 in pensions, investments and savings to be able to retire. Joe median saver won’t get close to that.(especially if they are expected to buy a house, have kids, save for college for the kids) just seems like a mountain to climb for us oldies. LoL

And for Japan not everyone is a professor at a university.

General rules of thumb are helpful to get started, but they are not very useful for individuals in my experience. Better to work with YOUR numbers (how much you are likely to need, how much you will have in pension income, etc.) then make a plan to deal with that reality.

[captainspoke]

...
We can also do this with life expectancy ...

Totally irrelevant, but I first read that as "wife expectancy"...