Publications Keying In


Keying In
September 2003, Volume 14, Number 1

Stock Market Savvy
"How would the average American manage $1.2 million? How about $2 million? This is a challenge many would consider beyond the expertise of the majority of Americans. It is a task, however, that most of today’s teenagers will face in the next 50 years. According to the Washington D.C.-based Employment Policy Foundation (EPF), the average high school graduate can expect to earn $1.2 million in his or her lifetime, while the average college graduate has an earning potential of about $2 million.
In its January 2003 issue, Keying In addressed the state of financial literacy and personal finance education in the United States. Given the average projected incomes cited by EPF, there is no question of the universal need for young adults to acquire money management skills.

Today’s young adults should learn how to budget and how to stay away from crushing debt. Just as importantly, they need to become wise in the ways of investing. Sound investments can help them to meet significant expenses in buying homes, educating their children, and funding retirement.

In particular, young adults should learn how to invest in stocks. Despite its dismal showing between 2000 and 2002, the stock market continues to be a place where Americans have a strong likelihood of seeing their investments grow in the long term. Between 1906 and 2000, the National Center for Policy Analysis reports that American stock markets returned an annual average of a little over 10 percent when adjusted for inflation. According to research from Merrill Lynch, the average annual return of stocks listed in the Standard & Poor’s 500 index (including the reinvestment of dividends) was 11.13 percent between 1953 and 2002."

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Catalog No. 135.88