Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited.

Why should we expect stocks to go up in the long term?
Does it make sense for stocks to earn a premium indefinitely? Yes. There is good reason to think that the stock market will make money indefinitely: the stock market is the primary mechanism through which investors bear market risk, which requires compensation.  If you think of all the owners of firms (stockholders and bondholders, generally) the risk premium that stocks earn stocks is the way bondholders pay equityholders to bear the risk that they do not wish to. Will stock prices always go up in the long run? As long as companies pay out less in dividends than their profit, prices will go up.  That could change if we were to change our corporate culture and/or tax practices so that firms paid out more in dividends.  However, for the purposes of your question, I think it doesn't matter much whether the investor makes money as dividends or capital gains. Does the 5-7% guess apply only to the US market? I didn't write (nor read) the books in question, but most likely that is a global number.  The US dominates the global equity market, so it's often a good proxy.  However, international returns taken together have no less risk and earn no less over long horizons in general.  The particular examples you have pointed out are special cases that only apply to a part of the global economy and a particular time period.  There are plenty of examples of stock markets and time periods that did much better than the US market to offset your examples. Is 5-7% a reasonable long-term estimate of equity returns? Equity will always earn more in expectation than risk-free securities will.  How much more depends on major economic factors.  5-7% has been a good estimate for the market risk premium for many, many decades (stocks should earn this plus whatever the risk-free rate is).  However, that is just an empirical observation, not a rule.  It can change.  Some day technological progress could slow down or stop, we could run out of important resources in a way that we can't compensate for, our population permanently could stop growing, aliens could invade, etc.  Down the road it is certainly possible for expected equity returns to go down and never go back up again.  This would result from a permanent, global, economic shift that I think would be pretty obvious.  That is, you wouldn't have to look at stock prices to know it was happening.