The NYTimes has a great visualization of S&P 500 returns for money invested any year between 1920 and 2009 and withdrawn between 1921 and 2010:
http://www.nytimes.com/interactive/2011/01/02/business/20110...
http://www.nytimes.com/interactive/2011/01/02/business/20110...
The difference is that this one factors in "taxes and fees".
In this chart, it says 1979-1999 is +8.2% per year.
Using the OP's data source, 1979-1999 would be 12.464% (using https://dqydj.com/sp-500-return-calculator/ which uses the same Schiller data set).
That's 4.2% per year obliterated by "taxes and fees". That seems excessive for "taxes and fees", given that it's buy-and-hold.
I don't know what to make of this discrepancy but I find it aggravating. Either Schiller's data has some strange assumptions built into it, or the OP's analysis draws improperly bullish conclusions from it, or the NYT chart is unreasonably bearish.
Either way, I still strongly believe people should not be generally expecting their investments to quadruple in 20 years. There's a whole investment industry that is based off of bad assumptions, and it's keeping people from investing in actually producing value for themselves and others.
What do you mean?
Leaving out compounding interest could massively affect the returns shown in the chart.
You can see that there are quite a few vertical slices where you will always result in a positive return. It's just a matter of how long you are willing to hold your money, and for what kind of return. That's why I'm attracted to index funds for investing.
How do people feel about investing in the SP500 right now? I'm not too bullish considering the current peak and the US political future.
It would be helpful if it compared against the same visualization for other straightforward market investments, like bonds, or savings accounts / CDs. Those asset classes would be red (or pink for long-term bonds, perhaps) across the board. Stocks look great in comparison.
But picking a slightly more reasonable color scale would help.
Not sure if I'm reading it wrong, but the key shows <=0% as red, 0-3% as pink, 3-7% as biege.
IMO it would make more sense to show 0-3% real return — strictly above inflation — as beige and 3-7% real return as a shade of green.