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6 "Facts" About the Stock Market
To help you determine a reasonable rate of return to expect on your stock investments, it might be helpful to review some "facts" about the stock market:
- The stock market's historical return can change dramatically depending on the period considered. - The market tends to revert to a mean. - History may not be a good predictor of future returns. - The pattern of actual returns affects your investment balance. - Historical returns do not include several items that investors must deal with. - Investors have a difficult time earning historical returns.These facts are only supplementary facts and have not yet taken into consideration the risk you are willing to incur. For that reason, it will be up to you as an individual investor to consider how much risk you would be willing to take on in your investments.
