Stock Market Cash

January 4, 2011 at 5:27 pm (politics) (, , )

This graph in the NY Times by Ed Easterling makes for fascinating reading for anyone who has any interest in dabbling in the stock market.  It shows how much money you would have made/lost in real terms depending on when you invested.  Although there is a trend to gain roughly 4% a year, the volatility of the stock market is gigantic: if you put in £10000 and didn’t touch it for 20 years, you could have lost 2% by the end, or gained 8%, all depending on when you invested.  Investments post 2000 have been poor on average, but there are nice patterns of “boom/bust” that *if they continue into the future* would indicate that the next 20 years might be higher than normal.  Or they might not; the stock market sucks that way!

In conclusion: don’t invest in the stock market if you need reliable returns in less than 40 years…

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