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<blockquote data-quote="Christhugger" data-source="post: 488078" data-attributes="member: 3948">Lots of mental and mathemtical gymnastics going on here...To start, stock market returns are in no way related to &quot;the amazing power of compound interest&quot;. The returns are reported in an eqivilent of compound interest only in the sense that they're presented annualised, but they are NOT compounding. The order of returns matters in the stock market.Unlike compounding interest, stock market returns don't &quot; just happen&quot; magically. They are based on the increased productivity, profits, and prospects of the economy as a whole. There is no guarantee.Those showing how a small investment effortlessly grows to millions over 40 or 70 or 100 years based on some historical 7-10% return over the last 100 years are fooling themselves that the same is practically guaranteed or bound to happen in the future...Those previous returns were based on:&nbsp; 2 world wars, the invention of the car, telephone, refrigerator, airplane, computer, satellite, robot, cellphone, internet, and modern banking. Top it off with a USA population growth from 100M to 300M in a cohesive, non-religious/lightly christian society with strong rule of law and strong moral fibre and strong family values (for the first half anyways).That is pretty god damn impressive, hard to compete with, and all THAT gets you is some 7-10% annaualized returns over 100 years...Don't be so arrogant as to think that the next 100 years&nbsp; are guaranteed, probable, or even likely to to be as good as the last 100. I sure hope they are, but all signs point to no.</blockquote>

[QUOTE="Christhugger, post: 488078, member: 3948"] Lots of mental and mathemtical gymnastics going on here... To start, stock market returns are in no way related to "the amazing power of compound interest". The returns are reported in an eqivilent of compound interest only in the sense that they're presented annualised, but they are NOT compounding. The order of returns matters in the stock market. Unlike compounding interest, stock market returns don't " just happen" magically. They are based on the increased productivity, profits, and prospects of the economy as a whole. There is no guarantee. Those showing how a small investment effortlessly grows to millions over 40 or 70 or 100 years based on some historical 7-10% return over the last 100 years are fooling themselves that the same is practically guaranteed or bound to happen in the future... Those previous returns were based on: 2 world wars, the invention of the car, telephone, refrigerator, airplane, computer, satellite, robot, cellphone, internet, and modern banking. Top it off with a USA population growth from 100M to 300M in a cohesive, non-religious/lightly christian society with strong rule of law and strong moral fibre and strong family values (for the first half anyways). That is pretty god damn impressive, hard to compete with, and all THAT gets you is some 7-10% annaualized returns over 100 years... Don't be so arrogant as to think that the next 100 years are guaranteed, probable, or even likely to to be as good as the last 100. I sure hope they are, but all signs point to no. [/QUOTE]

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