Despite tumult, stock-market tenets still ring true - USA TODAY
Ibbotson , which costs $185 and now is published by Morningstar, tracks investment returns back to the start of 1926 for asset categories including stocks, bonds and cash (Treasury bills). That equals a compounded average annual growth rate of 3. 5%, which would have kept T-bill buyers just slightly ahead of the 2. 9% annual inflation average over the 89-year period. Bonds would have done better, with $1 staked into long-term government bonds rising to $135, or 5. 7% annually on average. But $1 invested in a portfolio of large U. S. stocks, such as those in the Standard & Poor's 500 index, would have swelled to $5,317 by the end of 2014, representing annual growth of 10. 1%. The same $1 placed in riskier small-company stocks would... Clearly, high risk and high return go hand in hand. Stocks represent ownership in companies that form the backbone of the economy. But the price to be paid for investing in the stock market is an acceptance of risk — sometimes big dollops of it. Investors lose money almost three calendar years each decade on average. Large stocks have posted average returns of. Source: www.usatoday.com
