置顶讨论: 8% average stock return. A truth or scam?

屋漏痕 had a very good posting today. It inspired me to ask a question.

Finacial experts constantly use "historical 8% average return" as a selling point for 401K and other investment vehicles.

***Does anyone know how exactly they did the math to get this number of 8%?***

Hope below is not the way of their math:
(1) Assumption: DOW starts at 10000 on 01/01/2009
(2) DOW loses 5000 in 2009 = 50% loss
(3) In 2010, DOW rises 5000 back to 10000 = 100% gain
(4) Short-time conclusion: DOW's average return in 2 years is 25%.
(4) Repeat (2) and (3) for 10 times.
-->Long term conclusion, DOW's average return is 25% in 20 years. Therefore, we all shall fully invest in DOW!

所有跟帖： 

• 8% was true. But may not true in future -autumnmoon- ♀ (206 bytes) () 01/28/2009 postreply 12:16:56

• a uppen prof has shown it's 11%/yr over a long term. -dca- ♂ (33 bytes) () 01/28/2009 postreply 12:27:51

• this average is known incorrect. The close one should -knp- ♂ (23 bytes) () 01/28/2009 postreply 13:34:04

• 回复： some real numbers -wesley5- ♂ (1018 bytes) () 01/28/2009 postreply 14:45:08