Blinded By Greed?
Lately, I’ve been doing some research on the astounding returns of various investment classes over the decades.
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The S&P 500: How does a 9.92% annual return since 1928 sound?
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REITs: 9.77% per year since 1972.
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Large-cap value: Even better, at 11.13% annually since 1928!
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Small-cap value: An astonishing 13.15% annual return since 1928!!!
An extra 3% per year results in twice as much money at the end of 25 years! So keep that in mind when you compare the long-term returns of the various asset classes.
But these are long-term averages across some very different market and regulatory conditions. The fly in the ointment is that these conditions may very well be changed in the future, and returns might be lower than they have been in the past.
