Assuming dividend reinvestment, the S&P 500 has returned an annual average of 10% nominally (7% real), over the last 100 years or so.

The S&P 500 is the best reference index for US equities, but I'd be wary about using its history as a base case for retirement planning. The 60 years that its existed in its present form have seen the US economy grow consistently in a way that's almost unrivaled in human history. There are lots of good arguments for why the US will not grow as fast over the next 60 years, but for me the best one is just regression to the mean. Probably the US economy will grow at a rate closer to the lower rates common in our countries throughout human history, and over a long time frame the S&P 500 cannot grow much faster than the really economy.

Forecasting 7% long-term real returns from the current state of the S&P 500 ignores the current environment - the S&P 500 is currently priced very highly relative to historical prices.

There's an interesting bit of analysis that estimates an upper bound of 3.8% -- 3.95% real returns from US Equities. Worth a read.

> Valuations today are in the 97th percentile of all valuations in history and the 83rd percentile of valuations over the last twenty years (itself a period of very high valuations). Rather than assume that they will revert back to some past average, let’s start by granting the very bullish assumption that they will remain exactly where they are today forever.

http://www.philosophicaleconomics.com/2018/01/future-u-s-equ...

Edit: the same blog that has a great post "The Single Greatest Predictor of Future Stock Market Returns" which goes beyond "mean reversion" of equity valuations, to show how you can make a better explanation (and better long term forecasts) by considering supply and demand dynamics as investors, on average, shift their allocations of investments between equities, bonds and cash.

As previously discussed on HN: https://news.ycombinator.com/item?id=14948078

It's important to remember that it's average return over long term. There can be long dry periods.

https://finance.yahoo.com/quote/^SP500TR/chart?p=^SP500TR

SP500TR annualized return between 1998 - 2011 was just 2% (before inflation)

If you bought AMZN (Amazon) in 2000, you had to wait until 2010 before the price recovered.

It's important to save over long time and reduce risk before retirement.

S&P 500 annualised returns over:

5 years - 15.79%

10 years - 8.49%

15 years - 9.92%

20 years - 7.19%

25 years - 9.69%

If you followed basic financial advice since the 80s you'd achieve those retirns.

You can get guaranteed 11% returns at https://www.twino.eu/

I used it for a while; it did work and their published financials are solid, but being happy with some risk I decided stocks where a better play.

Still, it's a useful baseline.

tino shows a default or delayed rate of around 25%. That means your returns are not risk free.

That doesn't matter, because for the highest rated loans (Buyback and PG) Twino guarantee payments even in the case of defaults or delays.

That just shifts your risk to whether or not Twino succeeds. This may be lower risk than the original loans, but it is still risk.

That's not what "guaranteed" means.

In what sense? The company guarantees you will get paid back for the loans at 11%. For higher rates there is risk, but that isn't what I'm talking about.

"Guarantees"

Just like the "guarantees" Bernie Mandoff made to his "investors."

The money has to come from somewhere and the underlying assets producing returns are speculative.

If the underlying assets don't produce enough return for the company to offset losses, then that guarantee is worth the paper it's written on.

Like I said, they have solid financials. The loans they sell are at much higher rates.

Their "solid financials" don't change the fact that their "guarantee" is entirely based on speculative investments. If the returns are lower than expected they can't fulfill the "guarantee."

I say this as someone who invests in P2P loans. They are speculate investments.

Man, you really don't like this company for some reason. It's more like a bank than a pyramid scheme, except they have higher reserves. Sure, theoretically something could happen and all their customers may default on their loans, but by your logic even cash is "speculate" because your house could burn down.