In The Boiler Room -- Long-term Profits Illusory

According to this article, long-term investing is hype. Profits to be made in down cycles swinging up will not hold well over the life of the investor... Food for thought.

Shares rose at a real average annual rate of just 0.2 per cent during the first three-quarters of the century, even worse than the previous century's trend. During the euphoria of the 1990s, some commentators claimed that twentieth-century stock market statistics were misleading because of major drops in 1928-32 and 1972-74. According to them, one should ignore these two oddball sell-offs for a truer picture of stock market profitability.

The bear market of 2000-2003 eroded support for this theory. In fact, if you take a step back and look at the big picture, the recent downturn reminds us of the existence of a remarkably consistent long-term trend. The simple truth is that stock market prices do not rise all that much over the very long term. Periodic catastrophic declines that destroy years of accumulated profits are the norm, not the exception.

The Observer | Business | Revealed: the great stock market swindle