{"id":14484,"date":"2023-02-28T14:47:36","date_gmt":"2023-02-28T20:47:36","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=14484"},"modified":"2024-01-29T11:14:15","modified_gmt":"2024-01-29T17:14:15","slug":"hard-lessons-of-the-stock-market","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/hard-lessons-of-the-stock-market","title":{"rendered":"Hard Lessons of the Stock Market"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"14484\" class=\"elementor elementor-14484\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-40a35f36 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"40a35f36\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-5815c50b\" data-id=\"5815c50b\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-12e53644 elementor-widget elementor-widget-text-editor\" data-id=\"12e53644\" data-element_type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<p>If you\u2019re like most people, you believe there\u2019s a great deal of truth in the adage, \u201chistory tends to repeat itself more often than not.\u201d That\u2019s an important adage to keep in mind when it comes to saving and investing for retirement because it allows you to get a glimpse into the future by knowing something about the past. The fact is, the stock market has been repeating itself consistently enough throughout history to allow us to see some repeatable long-term patterns, or market \u201cbiorhythms,\u201d which are important to recognize and understand when it comes to building a smart, defensive investment strategy.<br \/><br \/><input name=\"gform_field_values\" type=\"hidden\" value=\"\" \/><\/p>\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-52c8ed1 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"52c8ed1\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2fe2f0e\" data-id=\"2fe2f0e\" 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tends to repeat itself more often than not.\u201d That\u2019s an important adage to keep in mind when it comes to saving and investing for retirement because it allows you to get a glimpse into the future by knowing something about the past. The fact is, the stock market has been repeating itself consistently enough throughout history to allow us to see some repeatable long-term patterns, or market \u201cbiorhythms,\u201d which are important to recognize and understand when it comes to building a smart, defensive investment strategy.<\/p>\n<p>First, you need to understand something about what particular \u201cversion of the truth\u201d Wall Street and most brokers like to tell when talking about the stock market. Most people have probably been told that the market averages about a 9% return over the very long run. The way that breaks down is that 2-to-3% of this return comes from stock dividends, and 6-to-7% comes from capital appreciation \u2014 in other words, a 6-to-7% average growth rate over the very long run.<\/p>\n<p>That may sound pretty good, but you must bear in mind something about how \u201caverages\u201d can be determined and why they can be misleading. If a friend told you that he jogged \u201can average\u201d of 10 miles per week with his business partner, you might be impressed until he explained that his partner jogged 20 and he didn\u2019t jog at all. Together, they do still \u201caverage\u201d that 10 miles, so he did tell the truth, but it was a misleading \u201cversion of the truth.\u201d<\/p>\n<p>That\u2019s kind of how that \u201caverage\u201d growth rate is determined for the stock market. The way the 6-to-7% breaks down over the long run is that there are huge periods of time where the market experiences extreme volatility, but the net result is zero growth. Then, there are huge periods of time where the market does very well, averaging over 10% growth and often into the 12-to-15% range. Factor zero in with that high range, and there is your 6-to-7%. <\/p>\n","protected":false},"author":1,"featured_media":16473,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"elementor_theme","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[4,5],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hard Lessons of the Stock Market - Johnson Wealth and Income Management<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/johnsonwim.com\/hard-lessons-of-the-stock-market\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hard Lessons of the Stock Market - Johnson Wealth and Income Management\" \/>\n<meta property=\"og:description\" content=\"If you\u2019re like most people, you believe there\u2019s a great deal of truth in the adage, \u201chistory tends to repeat itself more often than not.\u201d That\u2019s an important adage to keep in mind when it comes to saving and investing for retirement because it allows you to get a glimpse into the future by knowing something about the past. The fact is, the stock market has been repeating itself consistently enough throughout history to allow us to see some repeatable long-term patterns, or market \u201cbiorhythms,\u201d which are important to recognize and understand when it comes to building a smart, defensive investment strategy.  First, you need to understand something about what particular \u201cversion of the truth\u201d Wall Street and most brokers like to tell when talking about the stock market. Most people have probably been told that the market averages about a 9% return over the very long run. The way that breaks down is that 2-to-3% of this return comes from stock dividends, and 6-to-7% comes from capital appreciation \u2014 in other words, a 6-to-7% average growth rate over the very long run.  That may sound pretty good, but you must bear in mind something about how \u201caverages\u201d can be determined and why they can be misleading. If a friend told you that he jogged \u201can average\u201d of 10 miles per week with his business partner, you might be impressed until he explained that his partner jogged 20 and he didn\u2019t jog at all. Together, they do still \u201caverage\u201d that 10 miles, so he did tell the truth, but it was a misleading \u201cversion of the truth.\u201d  That\u2019s kind of how that \u201caverage\u201d growth rate is determined for the stock market. The way the 6-to-7% breaks down over the long run is that there are huge periods of time where the market experiences extreme volatility, but the net result is zero growth. Then, there are huge periods of time where the market does very well, averaging over 10% growth and often into the 12-to-15% range. Factor zero in with that high range, and there is your 6-to-7%.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/johnsonwim.com\/hard-lessons-of-the-stock-market\" \/>\n<meta property=\"og:site_name\" content=\"Johnson Wealth and Income Management\" \/>\n<meta property=\"article:published_time\" content=\"2023-02-28T20:47:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-01-29T17:14:15+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/johnsonwim.com\/wp-content\/uploads\/2023\/02\/Johnson-Wealth-and-Income-Management-Hard-Lessons-of-the-Stock-Market-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1000\" \/>\n\t<meta property=\"og:image:height\" content=\"1295\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Johnson Wealth &amp; Income Management\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Johnson Wealth &amp; 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The fact is, the stock market has been repeating itself consistently enough throughout history to allow us to see some repeatable long-term patterns, or market \u201cbiorhythms,\u201d which are important to recognize and understand when it comes to building a smart, defensive investment strategy.  First, you need to understand something about what particular \u201cversion of the truth\u201d Wall Street and most brokers like to tell when talking about the stock market. Most people have probably been told that the market averages about a 9% return over the very long run. The way that breaks down is that 2-to-3% of this return comes from stock dividends, and 6-to-7% comes from capital appreciation \u2014 in other words, a 6-to-7% average growth rate over the very long run.  That may sound pretty good, but you must bear in mind something about how \u201caverages\u201d can be determined and why they can be misleading. If a friend told you that he jogged \u201can average\u201d of 10 miles per week with his business partner, you might be impressed until he explained that his partner jogged 20 and he didn\u2019t jog at all. Together, they do still \u201caverage\u201d that 10 miles, so he did tell the truth, but it was a misleading \u201cversion of the truth.\u201d  That\u2019s kind of how that \u201caverage\u201d growth rate is determined for the stock market. The way the 6-to-7% breaks down over the long run is that there are huge periods of time where the market experiences extreme volatility, but the net result is zero growth. Then, there are huge periods of time where the market does very well, averaging over 10% growth and often into the 12-to-15% range. 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