Adjusted for inflation, long term is more like 7%. There have been some really ugly periods where returns were a lot less, however, sometimes lasting more than a decade. For a 30 year timeline, though, it's been a pretty good bet.
Incorrect, please re-read my statement. An average 10% annual return over 10 years. As the other reply to this notes, history shows in general this rule has held since 1970ish.
In the last ten years or so, returns have been extremely high. If you look back at all the data available, you get a number closer to 3.5% or maybe at the most 4%.
But it contained the great depression which probably will never happen again. Same for 2000-2010 period. It may be cherrypicking but given that bull markets are much longer than bear markets, the median return from 1940-1970 and then from1980 to 2000 and then from 2010 to now gives you a better idea of the returns going forward. The odds are you will be in one of the 8 winning decades instead of the two losing ones. In the absence of bad decades, and given how low interest rates are , how fat and strong corporate profits are, and low inflation is, real returns of 15-25 percent per year going forward would not surprise me.
Returns in the 70s weren't quite as bad as the DJIA graph suggests, because the companies in that average would have been paying substantial dividends.
That was a misnomer, you're right. But that doesn't meaningfully impact my point. An average annual 70% return, some years greater (notably, 2008) and some years lesser, but only a very small number of down quarters or months in the same time frame.
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