Re:Stock Market Returns Are Anything but Average
by as_i_fall on Friday April 30, 2021 @10:31AM
(#26993962)
Really interesting and somewhat surprising chart.
That said I think there's some important drawbacks to point out.
First, that 7% figure that's often quoted is usually meant to mean nominal return. At least, that's the way it works relative to the commonly cited 4% SWR.
Second, buying and selling exactly once will greatly increase the variability of returns and also the likelihood of negative returns. It's important though to realize that this isn't actually how almost anyone invests, so just counting periods of negative returns under that assumption isn't particularly meaningful.
That said I think there's some important drawbacks to point out.
First, that 7% figure that's often quoted is usually meant to mean nominal return. At least, that's the way it works relative to the commonly cited 4% SWR.
Second, buying and selling exactly once will greatly increase the variability of returns and also the likelihood of negative returns. It's important though to realize that this isn't actually how almost anyone invests, so just counting periods of negative returns under that assumption isn't particularly meaningful.