Quotes from Legends: Annual Return

Pg 21: The unimportant and difficult task to which most investment managers devote most of their time with little or no success is trying to "beat the market". Realistically-without taking above-average market risk-to outperform the equity market by even one half of 1 percent consistently would be a great success which almost no sizeable investment managers have achieved for very long.
Pg 39: The history of returns on investment, as documented in study after study, shows three basic characteristics:
1. Common stocks have average returns higher than bonds, which in turn have higher returns than short-term money market instruments.
2. The daily, monthly, and yearly fluctuations in actual returns on common stocks exceed the fluctuations in returns on bonds, which in turn exceed the fluctuations on short-term money market instruments.
3. The magnitude of the period-to-period fluctuations in rate of return increases as the measurement period is shortened and decreases as the measurement period is lengthened. In other words, rates of return appear more normal over long periods of time.
Pg 43: When asked what he considered man's most powerful discovery, Albert Einstein replied without hesitation: "Compound Interest".
Winning The Loser's Game Timeless Strategies for Successful Investing by Charles D Ellis, McGraw Hill.

Pg 25: From the beginning of1972 through the end of 1981, stocks earned an annual average return of 6.5%....However, inflation raged at 8.6% annually over this period, eating up the entire gain that stocks produced what is known as the "Gordon equation", which essentially holds that the stock market's future return is the sum of the current dividend yield plus expected earnings growth. With a dividend yield of just under 2% in early 2003, and long-term earnings growth of around 2%, plus inflation at a bit over 2%, a future average annual return of roughly 6% is plausible
Pg 113: The argument we made for common stocks in 1949 turned on two main points. The first was that they had offered a considerable degree of protection against the erosion of the investor's dollar caused by inflation, whereas bonds offered no protection at all. The second advantage of common stocks lay in their higher average return to investors over the years. This was produced both by an average dividend income exceeding the yield on good bonds and by an underlying tendency for market value to increase over the years in consequence of the reinvestment of undistributed profits.
The Intelligent Investor by Benjamin Graham updated with new commentary by Jason Zweig, HarperBusinessEssentials.