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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Greg Luke who wrote (2265)	12/2/1997 1:19:00 PM
From: sea_biscuit	Respond to of 42834

But, hey, if you want to turn that $25,000 your grandfather left you when you were 25 into $100,000 by the time you are 50 or 60, then leave it in an index fund. I see your point, but going by your numbers, if $25,000 were to turn into $100,000 in an index fund in 25 years, the market has to return 5.7% annualized for 25 years (it would be just over 4% if the time period is 35 years, taking the other end of the range that you specified). Wow! 5.7% per year for 25 years -- now, that would be one heck of a market! :-) Now, if you have to turn the same $25,000 to a million in 25 years, you need to generate 16% annualized. More importantly, you have to do this in a market that is returning a measly 5.7%!