In the past 90 years, the stock market has had positive retums, averaging 10% annually.True or False

In the past 90 years, the stock market has had positive retums, averaging 10% annually. True or False

Answer:

True. The title suggests that the stock market on average has delivered a return of ten per cent per annum, in the last ninety years is quite accurate.

This so usually refers to the S&P 500 index which measures the stock market situation in the United States. The grossed-up annual return on the index since the 1920s has been around 10%, Interactive, assuming reinvestment and adjusted for inflation. Nevertheless, it stands for an average over quite a long time, and the rate may vary significantly from year to year. For instance, the S&P 500 stocks were down by 37% in 2008 as a result of the financial crisis Sony Corporation on the other hand has been up by about 30% in 2013. That is why long-term investment and diversification can be considered as efficient methods helping to defend the money which was invested.

This long-run volatility has worked towards the fact that investing in the stock market is part of wealth accumulation that very essential for the future retirement plan. However, it seems absurd to ignore the fact that the specific performance of a company can be quite different from the evaluated average for the whole year and, therefore, annual results may significantly differ from the given ones.