Unbeatable equities

The only way to truly grow your capital in liquid assets over the long term is through investing in stocks. Since 1928, the S&P 500 has delivered an average annual nominal return of 10%—or 6.9% when adjusted for inflation. Thanks to the power of compounding, a long-term investor would have doubled his/her capital every 7.2 years in nominal terms and every 10.4 years in real terms, assuming they stayed invested.

In contrast, an investor holding 3-month Treasuries would still be waiting: with a mere 0.3% annual real return, it would take an astonishing 231.4 years to double their capital.

The takeaway is clear: if history serves as a guide, enduring the volatility of the stock market is a small price to pay for the long-term rewards of equity investing.