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Are stocks a good investment? How long should you hold them? How much would you earn and with what variability? Read the notebook to find out.

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The goal of this notebook is to find out if it's worth it to invest in stocks, and how much you're likely to earn. In this notebook, I'm not interested in a specific stock (say Microsoft or Walmart), but instead in the average performance of all stocks.

In other words, imagine I buy 100$ worth of the top 500 companies (these companies are commonly called the S&P500, or Standard and Poor's 500). Here are some questions I'd like to explore:

  • How much will they be worth in 5, 10, 20, 40 years? Was that a good investment?
  • Does the time of the purchase matter? Is buying too soon or too late a problem, or is it something I don't need to care about?
  • What is the variability? Are returns very volatile, or generally stable?
  • How long do I have to wait to have a 90% chance of making money overall?
  • How much money will I make on average?

Read the notebook to find out.

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"Money" by Pictures of Money - CC BY 2.0

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Are stocks a good investment? How long should you hold them? How much would you earn and with what variability? Read the notebook to find out.

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