Stock Market Return

Most of the financial analyst and guru would say it always make sense to invest in stock market for a long time. That means do not look your portfolio for short time check every 5 year or so and you will be richer. Yes its true it happens stock market (S$P 500) from 1950's to now return almost avg 11% annualy, and so what Dow. It is very important to know that its not the stock you own its the index. The index mean they remove underpeformer company and add good performing company. For example, there is only one stock in Dow since the begining and that is GE. So over the time most of the company in Dow was out of the business. So, if you do with individual stock you may not get that return.

Now the same though has a different angle. Barron's reported these stock market returns:

1901-1921, real returns averaged 0.2%/year
1929-1949, real returns averaged 0.4%/year
1966-1986, real returns averaged 1.9%/year

So avg 1% return for 60 years mentioned above. Sure, there were more substantial gains from 1921-1929, 1950-1965, and 1987-2000, but for more than 60% of the time in the 20th Century, the stock market returned an average of less than one percent.Then there's the matter of the large negative performance so far this century.

So what they says "Time does not matter" or "Don't time the market", I have to think twice.