From his 1965 Buffett Partnership shareholder letter, page 7:
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*Over a span of 20 or 30 years, I would expect something more like 6-7% overall annual gain from the Dow instead of the 11.1% during our brief history. This factor alone would tend to knock 4 points or so off our annual compounding rate.*
*It would only take a minus 20.5% year in 1965 for the Dow to bring it down to a 7% average figure for the nine years. Such years or worse should definitely be expected from time to time by those holding equity investments.*
**If a 20% or 30% drop in the market value of your equity holdings is going to produce emotional or financial distress, you should simply avoid common stock type investments. In the words of the poet - Harry Truman - "If you can't stand the heat, stay out of the kitchen." It is preferable, of course, to consider the problem before you enter the "kitchen."**
https://www.pragcap.com/wp-content/uploads/2015/07/1965.01.18.pdf