Sure but if you bought a broad index you were fine
I'm sure there are studies out there on the ratio of upper-middle-to-upper class households vs not, adjusted for inflation, with surveys on how they invest (if they do at all) with other factors accounted for. I know for sure that the total number of households who hold index funds (50+%) [0] far exceeds households that have a million+ in assets (10+%) [1]. If index funds were some magic bullet investment vehicle for multiplying your money, we'd see better ratios than 1:5 with only the top 20% becoming wealthy-adjacent (and that's provided that 100% of the millionaire class got rich via index funds and not other means like real estate).
[0] https://www.ici.org/news-release/ici-report-shows-mutual-fun...
[1] https://finance.yahoo.com/news/guess-percent-people-1-millio...
edit: as a corollary, I was just talking about this with someone who works in finance and the sentiment amongst ICs like them, they say, is that this is definitely a bubble that will pop at some point. The only contention is how devastating the effects will be, if it'll be a slump, a recession, or a depression.
Its very good and tells a lot!
Thanks for sharing!
It’s showing how much better or worse than inflation.
That’s not an apples-apples comparison.
Like if you don’t invest into say SNP500 then the money grows (or not) at what rate and is that rate better than the SNP500? It’s way better to get a 10% return when there’s 11% inflation if the alternative was 0%.
- Anybody wise enough to invest in the S&P 500 is likely also wise enough not to invest their entire nest egg in a single year, 20 years before retirement.
- The massive bulk of “ordinary American” 401(k) / IRA funds are in low-fee, no-tax-on-growth accounts. This chart has a nebulous “taxes and fees” component, which in this already artificial context makes even less sense to apply to annual returns.
- Counting only real growth without comparing to other investment options (real estate, bonds, cash under the mattress) fails to capture the relative value of diversified index funds. In short: Impossible to beat reliably no matter how you set the metric.