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Author: Matt1344 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75642  
Subject: Re: Vanguard Fund selections for retirement Date: 7/14/2004 11:31 PM
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"Can anyone see why, if the market behaves normally, that in 13 years or so I should be not be looking at a statement showing a return of between 9 to 11% on my investment?"

Hi aidendey,

That historical number is just that, historical. It is the average return over the past 100+ years or so. There is no way in the world to "know" how the market is going to do over the next year or 10 years. The Dow hit near 1000 in 1966 or '67 then retreated and didn't see 1000 again until around 1983 or '84, I don't think that quite measures up to an annualized rate of return of 9 to 11%. I'm assuming you meant annual return and not for the 13 years.

Just what time period do you call on to determine what "normal" is? Using that historical number lead a fellow to look more carefully at special cases... Using the 10% number a person retiring in 1972 and withdrawing at a fixed dollar amount thought they could "expect" their money to last 23 years... well when he ran the nuumbers based on the real returns for the years begining in '72, assuming they needed the determined money to live on, then it would have been gone in 8 years. Of course I'm hoping the next 13 years are kind to us.

"any last minutes thoughts, votes of confidence, abstensions or ridicule, would be deeply appreciated.

I do not mean to discourage you on investing, it's great that you're doing it. I think the Motley Fools may help us beat the average market returns. I prefer individual stocks over mutual funds generally, along with BRKB shares and some SPY's and MDY's and I do have 2 Fido funds ( FLPSX & FVDFX)I wish you the best of luck. I do believe it's a bigger risk not being invested in stocks than being invested.

Regards, Ken
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