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Comment by yread | Hacker News Reader

Would be more interesting to compare it against a realistic return from a savings account instead of saying "if the index is worth the same after 20 years then you haven't lost anything". You would have almost 25% more even in a 1.1% savings account.

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A 1.1% savings account would have lost money due to inflation over 20 years. The author's methodology seems to subtract each year for inflation, so if he's comparing a post-inflation number year to year, and it's the same 20 years later, you've actually done much better than a 1.1% savings account.

I haven't seen a 1.1% savings account in the better part of a decade. Perhaps that's not useful to theorize about in the modern economic wonderland we've created.

https://www.ally.com/bank/online-savings-account/

If you look at it that way, it's also hard to theorize about stocks in that modern economic wonderland "we" (they?) have created. There could be, for instance, a large wave of defaults on the plentiful debt created by low interest rates, which is probably bad for stock prices, or else the trend of rising P/E ratios due to a lack of safer ways to get a return on an investment could keep inflating stock prices.

https://www.gsbank.com/en.html

https://www.synchronybank.com/banking/home

1.05%, but close enough.

If you live in Canada

https://www.highinterestsavings.ca/chart/

The baseline is inflation, not flat. Inflation is almost always higher than savings account yield, and is a more accurate measure of "equal value".

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