You don't need Growth stock to retire, index funds and income/dividend stocks are all that's needed to retire comfortably. Individual investors should not be trying to pick individual growth stocks because it's highly risky.

The indexes themselves might underperform an index+VC strategy though if they don't have access to high-growth companies that are staying private.

Even if investors shouldn't pick stocks, it might be wise for them to invest in an index of companies that they are now prevented from investing in.

Supply and demand

Returns from private companies go up -> more VCs enter the market with higher returns increasing competition -> valuations get higher (meaning founders/employees get to keep more stock while investors get less) -> returns deflate and we are back at a balance.

There is a reason VCs have been complaining about sky high valuations and it's because most VC's don't even beat the sp 500.

> You don't need Growth stock to retire

The returns in those index funds are driven primarily by growth stocks.

The point of the article seems to be that the pool of stocks available to funds, etc., is shrinking.[1] You have a good point, but it isn't addressing this specific issue.

[1] I assume due to the prevalence of venture capital; that absorbs the returns of early startups.

If only a fraction of investments are available to the public, it creates economic inefficiencies: Resources are not flowing to the best investments.

Also, it creates a two-tiered system with self-perpetuating A and B economic classes, rather than a merit-based free market that allows social and economic mobility and opportunity. Generally, that is seen as antithetical to democracy and to American values in particular (not to exclude other countries).

You're assuming nothing like the Nikkei index from 1989 - present will ever happen to a US stock index. I agree with you but stock market growth is not a law of nature. Other tactics (e.g. dollar cost averaging) are also needed to ensure a secure retirement.

index funds are made out of stocks. If there are fewer companies offering stocks for the funds to use, they are weaker.

what income ranges are you imagining is the middle class?

Over a 40-year career, assuming 4% real capital growth after inflation and a 3% safe withdrawal rate in retirement, a worker has to invest 25% of their gross income every year to have the same net income in retirement (assuming identical taxation rates).

The median annual household income in the US is around $60k.

That doesn't leave much left to eat and cover up from the rain with.

Thanks mom.