Back in 1986 we threw $2,000 in my wife’s IRA Dreyfus Fund which tracked the Dow Jones. Last week we cashed it in for $13,234.30. An average annual return of about 7%.
However, as of December 31, 2007 the Fund had a value of $13,200, having earned an average return rate of about 9%. BUT as of December 31, 2008 the value of the Fund had dropped to $8,140, a drop of more than $5,000, 38% in one year!
You put your money in and you take your chances.
If you had invested that same $2000 in a simple savings account, or in very safe bonds, you would STILL have greatly outperformed social security. IF there was no tax on the earnings.
Leave people’s money in their own hands and let them determine the level of risk they want to take.