- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Historical S&P500 Returns vs. Inflation vs. GDP
Posted on 7/11/13 at 9:42 am
Posted on 7/11/13 at 9:42 am
This is a question that I've thought about for a while here... Why is the S&P historically able to generate an average 6-7% RoR, when inflation and GDP growth are typically around 2-3%?
I'm not sure about money supply figures, but I would imagine average MS growth is around the 2-3% inflation target.
How is the stock market continually able to generate returns much greater than inflation and GDP growth?
I'm not sure about money supply figures, but I would imagine average MS growth is around the 2-3% inflation target.
How is the stock market continually able to generate returns much greater than inflation and GDP growth?
Posted on 7/11/13 at 9:46 am to Cmlsu5618
The value added from the invested capital had better be greater than inflation over the long term or investing would cease.
Posted on 7/11/13 at 10:05 am to Cmlsu5618
Because you always want to be compensated for taking risk. If you only made as much as the economy grew or just enough to keep purchasing power steady, why would you take more risk?
People have to be incentivized to take risk, that goes outside of just investing into entrepreneurship and even social programs. Why would I take a risk starting a business when I pay all my profits in taxes or why would I look for a job when I can just keep getting paid by social programs?
"Greed....for lack of a better term... is good."
People have to be incentivized to take risk, that goes outside of just investing into entrepreneurship and even social programs. Why would I take a risk starting a business when I pay all my profits in taxes or why would I look for a job when I can just keep getting paid by social programs?
"Greed....for lack of a better term... is good."
Popular
Back to top
Follow TigerDroppings for LSU Football News