Let me summarize what I've been saying about the stock market: I think it's very hard to come up with a persuasive case that equities will over the next 17 years perform anything like--anything like--they've performed in the past 17 [years]. If I had to pick the most probable return, from appreciation and dividends combined, that investors in aggregate--repeat, aggregate--would earn in a world of constant interest rates, 2% inflation, and those ever hurtful frictional costs, it would be 6%. If you strip out the inflation component from this nominal return (which you would need to do however inflation fluctuates), that's 4% in real terms. And if 4% is wrong, I believe that the percentage is just as likely to be less as more.
Loomis, Carol. "Mr. Buffett on the Stock Market." Fortune, Nov 22, 1999. p212.
Investors who expect in aggregate, if they expect to get more than six or seven percent a year over the next ten or twenty years, I think they're likely to be disappointed.
Interview of Warren Buffett by Nightly Business Report executive editor Linda O'Bryon. April 28, 2001.
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