You had mentioned Jeremy Siegel to me before, and as is typical for me, I have a mind like a sieve, so I didn’t read the book.

I’ve been lax about monitoring my investments in the past, and my skepticism about future returns stems from that. The outlook for the S&P 500 index is always rosy for the index fund managers, bonds for the bond bulls, real estate for the Realtors, etc. Who do I believe, and what stake do people have in their recommendations to me? are the questions I’m starting to ask.

I think Walter’s assumptions are decent. Think about the fact that the S&P 500 has returned north of 10% over the last 30 to 40 years. Now think of all the stuff we went through as a country: Watergate, rampant inflation, high oil prices, terrorism, savings and loan crisis, scandals, internet bubble,… the list goes on and on. And yet, the S&P 500 kept chugging along.

If you haven’t done it yet, read both of Jeremy Siegel’s books (Stocks for the Long Run and The Future for Investors). Those books should help shed some light on asset class returns.

Finally, bonds and cash are horrible inflation hedges. As long as inflation is in check, stocks represent the best inflation hedge because during periods of rising prices, companies can raise prices.

Good post.

Welcome to the 10th edition of the Carnival of Investing. Whew, with hosting my Reverse Carnival last week and then putting this one together, I forgot how much time it takes. Thanks to all the submitters, and then also all previous Carnival hosts! Wit…