No. of Recommendations: 4
I think anyone interested in the likely returns from the broad US market in the next decade or two should read it.
Are you seriously suggesting that people with a 10-year time horizon should avoid the stock market and read a pessimistic academic paper? Sorry, that's just bad advice. I'm telling my kids to do the same thing I did - put 10% of their paycheck into their 401Ks invested 100% in an S&P 500 index fund. Keep doing that throughout their working years. It's the only way they're going to beat inflation and reach their retirement goals.
We all did well because profits soared because of one-time falls in interest costs and taxes.
No, we all did well because we stayed fully invested at all times and didn't listen to pessimists whose predictions would always be wrong. They all sounded smart at the time. Only problem is that their multi-year "forecasts" were wrong.
I can easily refute the claim that our profits were due to "one-time falls in interest costs". Interest rates have risen to record highs this year. Mortgage rates used to be under 3%, they're now over 7%. Interest on the 10-year T-bill quintupled from under 1% in 2020 to almost 5% this year. And, yet, here we are with the Dow at a record high, the S&P 500 up 23% YTD and QQQ up a whopping 50% this year!
The opportunity cost of listening to pessimists would have been tremendously high, and would have contributed to the retirement crisis in America.
