12/07/2021
The magic of compounding is little short of a miracle. Simply put, thanks to the
growth, productivity, resourcefulness, and innovation of our corporations,
capitalism creates wealth, a positive-sum game for its owners. Investing in
equities for the long term has been a winner’s game.
The returns earned by business are ultimately translated into the returns earned
by the stock market. I have no way of knowing what share of these market
returns you have earned in the past. But academic studies suggest that if you are
a typical investor in individual stocks, your returns have probably lagged the
market by around two percentage points per year.