stock market returns
The last ten years have been absolutely terrible for the stock market. It was the worst decade for the last 70 years. The Dow Jones fell 10% and the Nasdaq about 40% using the technology bubble burst. This may not seem like much, but inflation has reduced the value of a dollar dramatically in recent 10 years and the stock market has not helped out.
Other investments such as bonds and real estate have not done well or this decade. It's time to pack and stop investing your money? Absolutely not!
The average rate of return you can expect long-term stock market [ie, long period of 30 years] is 10%. 10% in one year is not long and two or three years to 10% a year will do nothing amazing as far as money is growing concerned. However, after 10, 20 and 50 years 10% annual compound to do incredible things with the money, even in small quantities.
It is unfortunate that this last decade has not tried to investors well, but there are plenty of reasons for optimism. The company shares are much cheaper now then they were this time for 10 years, when we were all worrying about Y2K.
I have no idea what will happen in the short term, but I know the second decade of this century will be much better than the first decade was for investors of all kinds.
Stock Market – Return on Equity (ROE)
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