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The picture changes again on even longer time frames. Stock growth rates have been remarkably consistent over the past couple hundred years. Even the Great D
by auntienomen 6y ago
The picture changes again on even longer time frames. Stock growth rates have been remarkably consistent over the past couple hundred years. Even the Great Depression is barely visible when you look at the largest sample we have. (Although, obviously one must discount a little for Keynes' objection about the long run.)
- spaetzleesser 6y agoMost people didn’t have a timeframe of 100 years. More likely something like 30 or less. If there is a downturn during that time and you don’t have enough cash to avoid touching your principal you can quickly have a problem. For example let’s say stocks have a downturn and you have a serious health issue it’s very possible that all your proceeds are gone and you don’t have any money to reinvest when the market goes up.