I’ve posted Entry #110 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s titled Why 30-Year Stock Returns Are Far More Stable Than 10-Year Returns.
Juicy Excerpt: Say that we see nine high-return years in a decade. If stock returns followed a random walk, the odds would be strong that, for the 30-year time-period starting with those ten years, we would see more than 15 high-return years. The same logic that applied with the 30 dice rolls applies here. The final 20 years should produce roughly 50 percent high-return years. So, if the ten-year starting period consists of nine high-return years, the odds of having at least 15 high-return years in the 30-year period are very good.