2024-05-03 22:30:00 ET
Summary
- Historical data shows that the majority of investments, including bonds, stocks, and real estate, perform poorly.
- Only a small percentage of investments generate significant returns, with outliers accounting for most of the gains.
- Leveraging investments has historically been a key strategy to turn mediocre investments into profitable ones, but the effectiveness of this strategy may diminish in the future.
Historical data shows that the vast, vast majority of investments perform poorly.
This is true for bonds, stocks, and real estate as asset classes. Nearly all of it makes for a bad investment for outside passive investors.
And what I'll show in this piece is that this is both normal and unavoidable. And unintuitively, I'll also show that it doesn't mean that most of those investments shouldn't have happened. But it does inform us a lot about how we should try to invest as allocators of capital.
A History of Duds
Whether we look at bonds, stocks, or real estate, the returns for most investments are bad. The top outliers account for most of the returns....
Read the full article on Seeking Alpha
For further details see:
Most Investments Are Bad. Here's Why, And What To Do About It