U.S. stocks have experienced zero returns twice in more than a decade due to inflation

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Set reasonable expectations

Countless investment gurus believe that everyone has too high expectations for stock market returns and is too impatient. If the mid- to long-term stock market can achieve an average annual real research return of 4% to 5% (excluding inflation), it will be quite good.

Charles． In his famous book “Winning the Loser’s Game“, Ellis said a sobering famous saying in the investment community: “The biggest mistake investors make is trying to beat the market!”.

Investors can use the free online query tool provided in my post “”Querier to Annualized rate of return for S&P 500 Index” to find out what the long-term average market return of U.S. stocks is.

U.S. stocks experienced zero returns twice

Charles Ellis talked about several sobering figures in his famous book “Winning the Loser’s Game“. For example, the Dow Jones Index was at 1,000 points during the 14-year periods of 1968 and 1982, and was at 875 points at the end of 1964 and 1981. In other words, during those 17 long years, although corporate profits increased significantly, the stock market made no progress. The reason is that inflation has increased interest rates from 4% to 15%, which has significantly reduced the price-to-earnings ratio.

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