What Average Returns Can Actually Do (If You Let Them)
Most people think investing is about chasing big wins. Finding “the next Apple.” Timing the market just right. Making that one move that puts you on a beach somewhere with a cocktail and no emails.
But here’s what the numbers say:
Most investors underperform the market—by a lot—because they’re too busy reacting to it.
Meanwhile, the people who just sit tight and ride the average? They often win by default.
The lesson?
Average returns are more than enough—if you don’t interrupt them.
Real Data, Real Results
Over the long haul, broad stock markets have delivered average annual returns between 7% and 10%, depending on the timeframe and mix of investments.
That may not sound thrilling, but here’s what it actually means:
- Invest $1,000 at 10%
- In 7 years: $2,000
- In 14 years: $4,000
- In 21 years: $8,000
You didn’t gamble. You didn’t chase trends. You just let time do the heavy lifting.
That’s the magic of compounding—boring at first, unstoppable later.
Time > Talent
The biggest investors in the world—pension funds, endowments, boring old institutions—don’t rely on flashy returns. They rely on consistency.
The truth is, staying invested is often harder than picking what to invest in. Why? Because staying put feels passive. It doesn’t give you adrenaline. It doesn’t win arguments at dinner.
But it builds wealth.
What This Means for You
Forget trying to outsmart the market. Forget FOMO. Forget the guy at the gym who “flipped a crypto token” and bought a used Tesla.
Here’s your strategy:
- Invest steadily
- Keep fees low
- Diversify across basic index funds
- Don’t touch it unless your future self says it’s okay
Because the minute you panic, pull your money, try to time your entry back in—you’re not investing. You’re gambling. And the house always wins.
Your Turn:
Are you expecting your investments to impress you every month? Or are you giving them time to work?
Review your portfolio, your timeline, and your expectations. Then remind yourself: boring beats brilliant—when it shows up every year.
Next up: “Investing Without the Circus. We’ll lay out exactly how to keep your portfolio simple, smart, and out of the drama.”
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