People say the stock market will always rise, and my stocks and shares ISA suggests I am also one of those people.

But in reality, the long term trend of the FTSE100 is not really that inspiring:


There are two ways to read this:

1. The market has a cap and we’re pretty close to it. This seems convincing from looking at the graph; we have hit this cap three times now and crashed immediately after. But I’m pretty sceptical because it raises questions of “why is the cap here?” which don’t have obvious answers.
2. If you extrapolate the gradient from the mid-late 80s through to the present day, you do actually end up with just about the right present day value. So you could argue that growth is healthy and linear, just with some bubbles along the way.


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