The Next Generation of Investors Is Doomed

Months ago, in an effort to explain my stance on the future of investing, I started writing why I don’t think passive investing will work as well for future generations as it did for those in the past.

I wrote 150 pages.

Even after all that writing, I still didn’t have the opportunity to go into depth on every point I wanted to make, and considering nobody would want to read a book written by me, I stopped.

The problem that I was arguing against, to be brief, is that we have an influx of people telling everyone that the only long term way to make money in the stock market is to invest in index funds, and everything else is just a waste of time. Even if some people can beat the market, you shouldn’t even try, they argue, because your odds are so low.

I disagree very strongly with this, not just because I think an average person actually can beat “the market” with enough effort, but I think the returns of the market will be substantially lower in the next 100 years than they were in the last 100 years. To save you the time, I won’t go into detail, but just know that is my stance for now.

So basically we’re supposed to get excited about 7 percent annual returns. These returns actually aren’t bad, especially for those who want to put zero effort into achieving them, but I think it’s ridiculous to expect that these returns are the best you can hope for, and that you’ll almost certainly come up short if you try to beat them.