Inflation

The graph above, found at the Charles Schwab website, shows how dramatically inflation has been curbed over the past twenty years - not just in the U.S., but globally.

I was a young adult in the 1970s, and I can clearly remember getting a paycheck and going the next day to a local bank to purchase a bank certificate of deposit yielding about 12%.  I think anyone who has managed their own money just for the past 20 years has very little concept of the influence of inflation.

Conversely, my experience through the 1970s-1990s "taught me" (incorrectly) that I could safely rely on 4-5% interest yields during my retirement.  No way, Jose.  I had no concept that fixed income returns would ever be less than 1% - and for sustained periods of time.

There is an old saying that "the market can remain irrational for longer than you can remain solvent."  There's a certain truth to that.

But if I were going to bet now and plan for a future 20-30 years from now, I wouldn't count on inflation and interest rates staying at these historic lows.