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This question stems after listening to Robert Kiyosaki's Rich Dad CD audio collection.
He stresses in his CD that he finds it "risky" that the majority of middle class U.S. workers have retirements that are completely dependent on mutual funds (or various other equities) and thus are dependent on the performance of the stock market by the time they retire.
This may be a basic question, but it made me wonder about what is the underlying idea behind why we would expect the market to provide positive, and by positive I suppose I mean beyond the 5% you could get risk free in a savings account/cd/etc, returns for us in the "long-run" by the time most of us would retire? (probably 10-40 years for the people in this forum)
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It simply is because the stock market has provided positive long term yields across its entire history.
http://www.finfacts.ie/stockperf.htm
11% average annual return for nearly 80 years.
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I am aware of this, but I wasn't satisfied with it. Probably because that common idea that past results do not guarantee future performance line that we've all come to know.
I was wondering if it would bring up some ideas like the strength of our economy or something.... unsure [img]/images/graemlins/confused.gif[/img]