Can the market run at 10% return annually?

This is a question most people wonder. Can we get an annualized return in the north of 10% for our life from now on? The question is tough, so is the answer.

The market is dynamic, it goes up and down fast. For one particular period, the market might be in negative returns, but for the long run the ODDs will be in favor of positive returns. SO don't be too pessimistic to the market once you get negative returns for some period.

Let us check some historical data on S&P 500 from 1928 to 2006. It is almost an 80 years span.

There are 23 negative and 56 positive return years between 1928 and 2006, the annualized return is 11.77% during this period. You may think that you can not live that long, so let's check the time frame of 1966 to 2006, the annualized return is 11.61%. Then how about the 10 year period of 1996 - 2006? The return is 11.06% annualized.

For the same 3 periods above, the T-bond returned 5.2%, 7.48%, 5.92% annualized.

For some investors, particular stocks might be too risky to have heart-break. Why not invest only the Spider fund? It is worry free if you expect you can live another 20+ years?

The S&P data above included both stock gain and dividends.

Don't be too Chicky just because you got burned from the recent bear market.