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REDDIT

10% a year returns… let’s just think about that for a second

B
Dec 7, 2025 · 04:33

If we consider S&P500 gaining 10% a year on average, and let’s be super generous and say it only achieves half in the future, 5% a year, and let’s then say that the mag7 trails this 5% a year growth on average (which I believe most would agree is not unreasonable), then are we really forecasting that in 40 years time, we will have companies worth 30+ Trillion? My brain considers investing as an almost 10% guarantee over a 40 year timespan when I retire, with volatility being ironed out by time in the market, but when you apply that to any of the top individual companies, that 10% annual return gives valuations that my brain can’t comprehend and interprets as ludicrous. Could we really see companies like Apple or Microsoft (or some other company that might take over in the future) or whoever else being valued at 30 trillion in 40 years time? Or is the stock market hitting some unknown limit of size? I believe the stock market will grow more, but when you consider that growth being driven by companies being valued at 10s of trillions, it all seems impossible!