Forget about “average” sharemarket returns, because you’ll hardly ever see them

Since 1900, US shares have returned 9.8 per cent per annum (including dividends).

That’s a recipe for wealth generation and an excellent way to ensure your capital grows more than inflation (which has been just below three per cent per annum over that period).

But here’s the thing, the market rarely delivers an annual return anywhere near that long-term average. It’s usually some way above or below that.

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