me. I'm not sure if I have a point with this, I just need to vent a bit. This is primarily referring to long term (i.e. retirement) investing where most experts will tell you to just invest in the whole stock market instead of trying to pick individual winners and losers. Over the long term, it is tough to beat the S&P500. I generally endorse that advice. However, it is incorrect and bordering on malpractice to tell someone to calculate a theoretical future balance in an investment portfolio using average S&P returns as a static effective interest rate. Simple example using round numbers. Say you invest $1000. This year, the market crashes and goes down 50%. But next year, it recovers and gains 50%. That's an average return of 0%, so your calculation would say you have $1000. Except you actually have $750 (down $500 then up $250). So that 0% return is really -25%. Basically, the down years hit harder than simply averaging the returns really calculates. Looking at real numbers, the S&P average return over the last 40 years is 10.43%. If you invest $2000 a year at 10.43% for 40 years, you would have $1.1M. But if you invested $2000 a year starting in 1985 and calculated year-by-year actual S&P500 returns, you would have $714K. Not chump change by any means, but you REALLY thought you were going to be a millionaire. It seems like most retirement calculators use a static rate of return for simplicity, but that can really mess up your planning.