If I invested $300,000 in 1952 in Dow and treasury bonds 50/50 split,
what would it be worth in 1994 , assuming I paid 35% taxes out of the
interest  and reivested the remaining interest each year?

---

Request for Question Clarification by omnivorous-ga on 18 Oct 2004 08:26 PDT

Shebes --

Are you sure that you want to run the calculations this way?

First, the highest tax bracket during about the first 30 years of that
period was higher than 35%.

Secondly, the advantage of buying and holding is deferring taxes on
capital gains, so selling every year would be counter-productive.

Looking at straight pre-tax returns would be easier as well.

Best regards,

Omnivorous-GA

---

Clarification of Question by shebes-ga on 18 Oct 2004 19:57 PDT

I do not care how you calculate it , I just want to know a rough an
estimate- Here is a hypothetical scenario: Lets pretend in 1952 I put
$ 300,000 in a stock and treasury bond port folio, lets say the
allocation is 50/50. I then leave the country for 40 years, ie, move
to Europe and I never touch a penny of the money. I tell my
attorney/buisness manager to pay my yearly taxes and reinvest what
ever is left - I am in the highest tax bracket and I keep most of the
same type of investments  ie, cocacola,GM, etc just to name a few. I
then return from Europe in 1992- How much roughly would this portfolio
be . I do not need an exact # , just a general estimate?  Thanks alot
, I really appreciate it , shebes

The Dow was at $270 in Jan 1952 and ended 1994 around $3770.  The easy
calculation is $150,000 invested over that time and then subtract
taxes at the end:
$150,000/$270 = 555.55 "shares" of Dow in 1952
555.55 * $3,770 = $2,094,423 in 1994
$4,188,884.7 * 0.65 = $1,361,375 after taxes in 1994 

$1,000 30 year bonds in 1952 had a redemption value of $7,125.60 in 1982.  

$150,000 at that rate turns into $1,068,840 in 1982 where bond rates
were 6.66% so from 1982 to 1994 that turns into:
$1,068,840 @ 6.66% for 12 years = $2,378,045
$2,378,045 * 0.65 = $1,545,729 after taxes in 1994

$1,361,375 + $1,545,729 = $2,907,104 total after taxes in 1994.

Then in 1982 you could get 6.66% bonds.  6.66% for 12 years 

This is the quick easy way of course and not exactly what you asked
for (since taxes were considered at the end rather than yearly as you
requested.  It's not too hard to find a tax differed investment and so
this is typically what would happen.  If I'm feeling bored and have
over an hour or 2 to burn later then I'll crunch some numbers for your
real answer :)