FYI: It is hard to overstate the importance in finance of a simple assumption: stocks are good investments for the long run.
Stocks offer more risk and return than bonds, and the difference is the equity risk premium, typically about 6 per cent. Dividends compound over time, snowballing into fortunes or, for mere mortals, retirement nest eggs. Profits tend to grow along with the size of economies. See basically everything Warren Buffett has ever said.
When it comes to long term profits, the tendency is to use the US market as an example, because reasonable data has been kept since the 1870s, as well as it being the biggest, deepest and most celebrated market of them all.
Yet, it turns out the US may be an outlier. When we’ve been constructing pension systems, for instance, it may be that the world has mistakenly treated the best investment example as typical.
Regards,
Ted
https://ftalphaville.ft.com/2018/02/13/2198717/everyone-is-wrong-on-the-internet-stock-market-returns-edition/
