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The US economy doesn’t grow at 7% a year but that’s what the s&p is expected to do

>>tjs8rj+(OP)
Well, the S&P (assuming the S&P 500) doesn't represent the entire US economy, but 500 companies that represent, arguably, the "winners" of the US economy, so expecting them to grow 7% while the entire economy as a whole grows less is not unexpected.

>>hrunt+M
How much of that is inflation? If, historically, GDP growth is about 3% and inflation is about 3%, and you're trying to invest in the strongest companies, is that how you get to 7%+?

>>majorm+U
how many companies lose money for a few years and fold? if the S&P is winners, then it is counterbalanced by all the bad investments, pre revenue startups, and other businesses which are losing money. balancing out to 3% is not impossible.

>>tjs8rj+(OP)
Population growth + inflation + transfer of wealth from workers to capital owners + productivity gains has over the long run been pretty close to 7%.