Skeeter,
First, let's define long term. I propose a span of 30 years (a generation).
Next, let's pick a broad-based equity market index (your pick).
Next, let's calculate the 30 year return for the index for each year starting any particular year (your choice), for the next 30 years.
[For example, if one was to pick the DOW and 1929 as the starting year, one would need to calculate the total 30 year return for the DOW through periods 1929-1959, 1930-1960, ..., 1959-1989.]
Next, let's check how many of these 30 year returns are negative. The answer is, less than 5% (I don't remember the exact percentage).
Which means that there is a 95% chance that a long term investor will not lose any capital on a nominal basis.
Now let's adjust the return by inflation. The conclusions will remain pretty much the same.
What does this tell you?
-BGR. |
