Originally posted by 2001frontier:
You made the claim, you prove it biatch!

The road to prosperity, Wall Street has long maintained, is paved with investments in stocks. President Bush takes a similar position in urging private accounts as part of Social Security.

Who can argue?

Stocks have averaged an annual return of 6 percent above bond yields since the 1920s. No wonder roughly half the households in the United States have invested money in stocks, either directly or through a retirement account.

There's a catch, though. Stock markets don't hit the average each year. Performance runs in streaks: Many strong years can be followed by many lean ones. This repetitive pattern has mystified many market analysts. So young Americans, contemplating Mr. Bush's proposal to replace a portion of Social Security with an investment component, may have to factor in this market cycle, not just their age, when planning a retirement date.

Actually, all investors should perk up their ears if a 2003 paper by three economists is correct. Their forecast: Stocks for the next 15 years or so will be weak - returning maybe only a third of their historical average. The reason for this is even more surprising: demographics.