Let’s calculate cumulative wealth per $1 invested for the 1990s, one of the two greatest decades in the 20th century in which to own common stocks. This will provide you with a perspective on common stock returns at their best. Using the S&P returns in Table  6‐1 and converting them to return relatives, the cumulative wealth index for the decade of the 1990s (the 10‐year period 1990–1999) would be 

Thus, $1 invested at the beginning of 1990 would have been worth $5.23 by the end of 1999. Obviously, any beginning wealth value can be used to calculate cumulative wealth. For example, $10,000 invested under the same conditions would have been worth $52,300 at the end of 1999, and $37,500 invested under the same conditions would have been worth $196,125.

Table  6‐1

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CW190-99 = 1.00(0.9686) (1.30)(1.0743)(1.0994)(1.0129) (1.3711)(1.2268)(1.331) (1.2834)(1.2087) = 5.23