(no subject)

From: Laeeth Is'Harc (laeeth@Avaro.com)
Date: Thu Jun 08 2000 - 10:29:02 MDT

[Non-member submission]

James Rogers wrote:
> Brian is correct. [...] the average return of the
> stock market is in the 9-13% range annually when averaged over
> decades.

> Short of a serious statistical anomaly and poor investment
> practice, the stock market provides some of the safest and
> best investment instruments available.

> In short, a blind monkey with a diversified portfolio can expect > an 11%
return over the long-term.

Those numbers sound about right for the US market. It's worth noting though
that basing your strategy solely on US returns neglects survivorship bias.
It would have been hard in 1920 to know that the US economy would have
survived the major disruptive events of the last century largely unscathed
(in contrast to Germany, Poland, Argentina etc).

If you try to adjust for this, the historical equity premium looks much
lower - see "A Century of Global Stock Markets", a WP by Goetzmann and
Jorion or the review article at:


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