What percentage of investors achieve these returns?

[hiriskpaul]

Past returns tell us little about the future. Current asset valuations are high by historical standards. Climate change will have an increasing impact. Other catastrophes cannot be ruled out. When everyone says that equity investing is a one way street with only blips on the way, a crash soon follows. Nonetheless, we have to put our money somewhere, and no one knows the future.

Nonetheless, for what little it is worth, I have averaged about 50% cash and bonds over the last twenty years since I retired. My investments have nonetheless grown at an average rate of about 9% p.a. over that period. During the early years, I was taking money out before my pensions started payment. During the later years, I was not spending all my pension income, so there has been a net cash input. All this tells us is that my investments have been successful, and that I do not spend very much.

Stock prices are high, but not that high if you factor in long term low interest rates. Even US shares prices are note that if you take their high earnings growth into consideration.

Whilst you are right about past returns not being a reliable guide, the stock market as a whole, globally, has shown great resilience to some quite cataclysmic events over the last 100+ years. Thousands of companies have gone out of business, entire stock markets have, but the overall market keeps bouncing back, making and growing profits - so far. Future returns cannot be guaranteed of course, but what is the alternative to investing in risk assets?

[GeoffF100]

Future returns cannot be guaranteed of course, but what is the alternative to investing in risk assets?

I agree. We have to put our money somewhere. Safe bonds are yielding less than inflation. If we want to preserve the spending power of our money we are forced to take a risk.

I am fortunate in that my defined benefit pensions are more than enough for me to live on. I would need to draw some money from my investments if I needed long term care, but that is not a real issue with my numbers.

Interestingly, when I retired, there was a possibility that I would run short of money, but that does not look realistic now. Accordingly my equity allocation has gradually gone from about 20% to about 60% and rising. That is a long way from my age in bonds!

[tjh290633]

When I get back home I will repost my record of dividends per income unit, compared with the RPI.

Notwithstanding the traumas of 2008-9, the dividends since 1987 have been comfortably ahead of the RPI by a considerable margin.

TJH

Inflation plummeted in the early 80s and stock markets soared way above inflation, even with brief blips in 1990 and 1994. The boom ended with the bursting of the dot com boom. Dividends would have grown faster than inflation during that period and probably even after the dot-com bust as many of the companies caught up in the bubble paid little or no dividends.

I know that. For me dividends fell by almost 50% in 2009-10, but still were ahead of inflation using 1987 as the start. They took a few years to recover.

What is obvious is that, if you avoided companies fashionable in the dot com era, then you didn't suffer anything like as much. Dividends held up. They fell 10 years later, of course.

Don't confuse share price movements with changes to dividends. There is a connection, but not direct.

TJH