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Making Cents: Why the Stock Market Is So Popular

April 21, 1996

Putting $2,000 annually in a diversified IRA earning a 10% rate of return--the rate at which the stock market has been growing historically--would balloon to $216,400 in 25 years. That same amount earning 6%--common at banks now--would total $116,300. The only trouble with this comparison is that the 10% rate is more risky. It could average much less for decades and still be consistent with previous historical periods.

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