Q: Will The Russell 2000 go up?

A: Yes

Q. But will it go up over the next 5 years? Is my money safe there?

A: Yes. (I’m 89.0% sure of my answer, using to calculate 5 years of investment with a lump sum of $100,000, and a withdraw of that $100,000 at the end so I could get the nice number rather than staring at the lines and seeing how many went down. The average line more than doubled. Their data goes back to 1927, and I am using U.S. Small caps as a proxy for the Russell 2000. Inflation adjustment was turned off to make the numbers clearer, except where stated otherwise, and I assume 0.5% per year management expenses).

Q: But five years is a really long time! Will it go up next year?

A: You ask such hard questions! I’m 2/3 confident that it will go up next year (well actually 67.5% sure, with an average profit of 18.9%).

Anyway, your question is kinda odd, because you probably are investing for more than one year. If you put inflation (at the CPI) back in, and give yourself a 10 year horizon, you still come out ahead 91.2% of the time, with an average gain of 168%.

Q: Would I be safer in the S&P 500?

A: No.

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