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Originally Posted by wab
2) Is the overall stock market risk premium too low? * A lot of things suggest that people are underestimating the long-term risk and overestimating the long-term returns.
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When you say people, do you mean people on this forum or people in the World? Please elaborate for us.
I don't see any folks on this forum thinking they'll put money in the S&P500 index fund and rack up 12% a year with 3% inflation. Most of us here are pretty conservative.
In fact, personally I would have no trouble if my portfolio just kept up with inflation with 0% growth. 1% real would put me on easy street. Is this overestimating the long-term return? Please give me your definition of a reasonable estimation. I do understand volatility and RTM, so no need to cloud the discussion.
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