For those who have this question-
The Stock Market is Not a Casino
A reader asks:
Ben showed the numbers for U.S. stock positive returns over the long-term. How does the data look for global ex-U.S. performance?
Fair question.
Here is the data I showed in a recent blog post:
Since 1926, the U.S. stock market has experienced positive returns:
My least favorite description of the stock market is that it’s just a casino where the house always wins.
- 56% of the time on a daily basis
- 63% of the time on a monthly basis
- 75% of the time on a yearly basis
- 88% of the time on a 5 year basis
- 95% of the time on a 10 year basis
- 100% of the time on a 20 year basis
Maybe this is true if you are a day trader. But in a casino the longer you play, the higher your chances of walking away a loser since the house has the edge.
The stock market is the opposite of a casino. The longer you play, the higher your odds of success in terms of experiencing positive returns on your capital.
The ability to think and act for the long-term is your edge as an individual investor. Patience is the ultimate equalizer.