2min chapter

The Rational Reminder Podcast cover image

Episode 259: Comprehensive Overview: Estimating Expected Returns

The Rational Reminder Podcast

CHAPTER

The Uncertainty of Expected Returns

Will Getsman: Stock returns may be a little bit mean-reverting, but that process is also full of uncertainty. He says it could take you 20, 30, 40 years to really understand what the expected return or average historical return is. But history helps you because over very long stretches of time, the stock market returns some amount in a relatively narrow band once you can control for things like inflation.

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