Finance Work
Write two paragraph about this question.
We learn in this class that the average returns for large-cap stocks have been around 9 or 10 percent. This is in a period where GDP growth has averaged 3 percent. How is this possible that stocks can produce a multiple of GDP growth?
If the "new normal" for GDP growth is 2% (or less) what would be your long-term average of future stocks returns? Why?