Security vs. the stock market
21 October 2004 - Las Vegas Review-Journal
Annette Bonder uses
anecdotal evidence about her stock market returns to discredit
any plan to reform the train wreck that is Social Security by allowing
workers to provide for their own retirement. The specific point
in time at which she invested would be considered by many would-be
Warren Buffetts to be an unlucky time to invest, but only a short-term
thinker would stop there.
average, year-over-year return of the stock market as a whole (meaning
index funds like the S&P 500 that mimic the overall market) is 11%
per year - thatís the average, including all the ups and
downs that the market has seen over its lifetime. One great example
of this long-term growth is that an investment of $1,000 on October
23 1929, right before the crash, would have resulted in a value
of over one million dollars 40 years later.
Security was never designed to make anyone rich (except maybe the
federal bureaucrats "managing" it), but it certainly wonít be there
at all to keep 29-year-old workers like me "out of poverty" in 40
years. Something must be done, and privatizing accounts will hurt
a lot less now than the whole ponzi scheme collapsing under its
own weight will hurt later.