<< Over the long term, stockholders have averaged 7-10% annual real returns; over the last 20 years, it's been half again as high. Prospects over the next few years probably aren't too good, but over the long sweep of things, people who own diversified stock portfolios have nothing to complain about.
Rentiers have bellyached about officers looting "their" companies for
a couple of centuries. Starting in the late 1970s, they got organized
about their complaints, fueling first the leveraged buyout mania,
then pension fund activism. All the "unnecessary" expenses, like
above-minimal wages and fringe benefits were cut. Workers lost,
rentiers won. Your couple of hundred shares don't matter much next to
the vast gobs of them held by institutional investors and the very
rich, though.
>>
I'm supposed to be a rentier. Just doing my duty. People of my generation and class were supposed to fund retirement with pension, savings, and Social Security. Remember, everyone? Conventional wisdom at the time. The three-legged stool.
I must be the very last of that generation.
Pensions are now gone. It looks like Social Security will go too, and the savings plans substituted for pensions look dubious to me. The Left (what's left of it) tells me I was wrong to use stocks for savings. There goes one leg of the stool. The Libertarians tell me I was wrong to use Social Security. The next leg gone. And the Capitalists tell me too bad about the pension. That leaves people like me flat on our asses.
Now, you got me wondering how we rentiers missed the nomenklaturi. We rewarded the named employees with options when they took fringe benefits and wages from the unnamed employees? What a dumb thing to do.
More seriously, what you say agrees with what a libertarian friend of mine tells me, though he doesn't use "rentier". He says "shareholders." He supposes that shareholders get enough return that they tolerate the executives's overly feathering their nests. On rare occasions, such as with Charles Wang of Computer Associates, they get upset enough to go to court.
Whatever the nature of stocks, I think your impression is right, they aren't going to do well over the next few years.
-- John K. Taber