The long term average return for the S&P 500 falls somewhere around 10.4%. Adjusted for “average” inflation, you’d get something around 7% for a real return, which is the rate most sites recommend using for retirement planning.
People need to remember how long the long term is. 1 year is really really short in the stock market. Even 5 years isn’t long enough to expect averages to work out. This example is a perfect case of where you can use this sort of averaging. It’s over a long timeframe, and utilizes dollar cost averaging, which minimizes the risk of short term fluctuations.
