Quote:
Originally Posted by Alex from Montreal
|
Oh so now we're not talking about small caps anymore, but specifically 1 index of small cap value stocks. That's one specific index with fairly narrow focus. The average stock investor isn't dealing with indexes but funds or individual stocks. You also have to figure in much higher liquidity risk, even assuming for the moment that the market is actually over time really going to generate a 15% return if you hold long enough. What if you have a fiscal emergency when the market happens to be down? Small caps expose you a LOT more to market volitility, which you can't necessarilly afford with your savings.
In any event nothing you've said changes the fact that the
average investor cannot realisticially replicate 15% per annum returns.
It also doesn't change the fact that the principal of compounding has nothing whatsoever with stock appreciation so I don't know why exactly you keep bringing it up. Debt compounds, not assets.