Which stock market every 6 years?

David: Which stock market every 6 years?
My professor in economics said that “the stock market doubles your money every 6 years.” Okay, this statement made me realize how much I really don’t know… By “the stock market” does he mean the NYSE? There are hundreds of exchanges… How can I see this doubling-every-6-yrs phenomenon in past data, where can I find a graph and more information? I need a little light on this, from someone who knows the financial field.

PS; I plugged some numbers into my nifty little financial calculator, and it says a rate of return of 12.24% is required to double your money every 6 years… seems kinda high.

Answers and Views:

Answer by scobranchi
I think your professor was just making a generalization about the overall market but I agree he’s off his estimate by a year or two. If you look at the historical returns of the market in general, you get on average 9-10% returns. That should double your money about every 7 years. However, that is if you look at returns of the NYSE since it’s inception. If you look at the market over shorter periods of time, you may get much better returns or much worse so unless your investment horizon is on the order of 150 years, the whole “double every seven years” is just a generalization that is wrong more often than it is correct.

Answer by KD7ONE
I’ll bet he didn’t tell you that you have to pay taxes on the shares you sell, weather you make a profit or not.

If you want to put your money in a tax free place, try precious metals, like gold and silver.

Answer by Gaytheist Buddha
Answer 2 is way off… you only pay taxes on your profits (selling price less purchase price and sales charges). You pay ordinary rate for holdings under a year and at the lower capital gains rate for holdings over a year.

The typical 8% return means you double in 9 years (rule of 72).