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Really, I do not understand your reasoning since the S&P 500 has an annualized return of >10% since 1970. https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_
by gonzoflip 10y ago
Really, I do not understand your reasoning since the S&P 500 has an annualized return of >10% since 1970.
https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_returns https://en.wikipedia.org/wiki/S%26P_500_Index#Annual_returns
- toomuchtodo 10y agoJust because the S&P has seen such returns over the last 40 years, doesn't mean you'll see those returns over the next 40 years. The US economy is aging out, has stagnant wages, etc.
- harryh 10y agoAlso we saw a huge drop in interest rates that won't happen again over the next 40 years.
- toomuchtodo 10y agoGoing to disagree with you here. I think it'll be impossible to raise interest rates much further without causing economic damage. See negative interest rate policies in Japan and Europe, and close to zero rates still in the US.
- harryh 10y agoI 100% agree with you about the difficulty of raising rates. But I don't think they'll continue to drop like they have over the past 30 years. I have a hard time imagining a world of -5% to -10% rates!
- toomuchtodo 10y ago> I have a hard time imagining a world of -5% to -10% rates! A year ago I would've agreed with you, but with the ECB at -.04 and Japan at -0.02, I believe it more likely than previously.
- harryh 10y agoHeh, fair enough. It's certainly very surprising to see rates below zero. So, indeed, I am much less certain about the future!