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by magnamerc
2563 days ago
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To follow up with your first point, there's been some analysis suggesting that financial markets today are more efficient than they were in the 20th century, which means that price discovery happens more quickly. Historically, the markets returned 8-10% for people invested in indices. I've heard that the market returns today are closer to 3-4%, so even with FIRE you'd realistically need to budget for 1-2% to accommodate for market fluctuations. |
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For example, for the popular pick VTSAX (Vanguard's Total Stock Market Index Fund), if you look at the average total return % for recent windows of time:
- YTD: 16.23%
- 1-Year: 4.43%
- 3-Year: 13.28%
- 5-Year: 9.97%
- 10-Year: 14.15%
- 15-Year: 8.91%
The 1-year number is just skewed by the late 2018 market correction in the short term.
Source: https://www.morningstar.com/funds/xnas/vtsax/betaquote.html