windsurf said:
A few decades of history support the propositon but is there anything else in the science of the known universe to bolster this faith? Hoping so . . .
There is no law of nature that requires stocks to go up, even over the very long-term.
The equity market, and the supporting economy, is a human contrivance. And as such, it is vulnerable to the fallibility of humans and human institutions. I'm occasionally struck by how fragile our peace, prosperity, and democracy really is. A quick look at the anarchy following the New Orleans levy break or the election of an aspiring dictator in Venezuela is enough to illustrate how precariously our good fortune is balanced.
But life is not without risks.
A long-term investment in the equity market is essentially a bet on the durability of our current political and economic systems. Those systems are wired to reward innovation and efficiency in the name of meeting and
creating needs. To the extent that such systems are allowed to work largely unfettered innovative people will continue to create things of increasing value, each of which adds to the overall prosperity of humanity. It is from these broad economic drivers that long-run equity returns are derived.
Nothing is ever guaranteed. But as long as people are given free reign to improve their lives; as long as exogenous disasters are limited in scope; as long as innovators can continue to tease higher productivity out of limited human work hours and are incentivized to do so, the world economy, and returns to the owners of capital, will continue to grow over the long-term.
It is, no doubt, a matter of faith. But the alternative carries its own risks.