Mitch McConnell: I 'Burst Into Laughter' When Geithner Outlined Obama's Fiscal Cliff Plan

[grantcart]

67. lol yeah why let facts color an opinion.

I will drink facts and leave kool aid to you.


The facts, well established are that over LONG periods, the stock market index funds have had a rather stable performance. The problem of course is maintaining a long term approach. If you enter at the high part of the market and have to sell at the low part of the cycle then you will not gain. It does require a certain risk tolerance. Since President Obama has become President key indexes have doubled in value.

http://kuznets.fas.harvard.edu/~campbell/papers/stockrisk.pdf

Evidence of this sort is found in Jeremy Siegel’s well-known book Stocks for the Long
Run (2nd ed., McGraw-Hill, 1998). Using historical US data from a period of almost 200
years (1802-1997), Siegel compares the range of variation of real returns on stocks, longterm
bonds, and Treasury bills. In their best single year, stocks delivered a real return of
67%, while in their worst single year they returned –39% for a range of 106%
(67%+39%). The one-year range for bonds is far smaller at 57%, and the one-year range
for Treasury bills is smaller again at 40%. A similar pattern emerges if one compares
standard deviations of annual real returns as measures of risk. In the 1802-1997 data the
standard deviation of the annual return is 18% for stocks, 9% for bonds, and 6% for bills.
For an investor with a one-year holding period, stocks appear to be considerably riskier
than fixed-income investments.
The picture is very different for long holding periods of a decade or more. The average
annualized real stock return over the best decade between 1802 and 1997 was 17%, while
the average return over the worst decade was –4% for a range of 21%. The decadal
ranges for bonds and bills are 18% and 17%, respectively. Over 20-year periods the
ranges for all three assets are almost identical at 12%, and over 30-year periods the range
is actually smaller for stocks at 8% than it is for bonds and bills at 9%. Standard
deviations of real returns follow the same pattern when measured over long holding
periods; they are roughly equal over 20-year periods, and lower for stocks than for bonds
or bills over 30-year periods. It would appear that stocks are no riskier than bonds and
bills for long-term investors who can hold their positions for at least a decade. Similar
patterns are visible in some international markets, although reliable long-term data are
harder to come by overseas.1