I’ve posted Entry #101 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called What We Can and Cannot Predict About Stock Returns and Why.
Juicy Excerpt: It’s a shame that we cannot predict short-term returns. If my calculator did that, I would be rich and famous. Still, we should be grateful that we do get statistically significant results for time-periods of greater than 10 years. That’s a big deal. What it means is that, so long as you are willing to commit to your investing decisions for at least 10 years, you can pretty much eliminate risk from the investing project by looking at this calculator before making allocation decisions. If you know what your return is going to be before you put your money down on the table, it cannot be said that you are taking on risk.