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It’s true that our understanding of finance is largely based on historical returns; however, you should remain cautious in your interpretation of this data. Key points include:

📌 Changes Over Time: The world has significantly changed over the past century, making direct comparisons difficult.

📌 Historical Data Utility: Despite these changes, historical data remains essential because models and forecasts are all rooted in historical data.

📌 Distribution of Returns: Historical returns can help in understanding the distribution of potential future returns, though there is no precise prediction.

📌 Stability and Relationships: The long-term average returns of markets show remarkable consistency over different periods. Historical data helps in understanding the risk-return relationships between different asset classes.

You should always keep in mind that while past market performance provides valuable insights, it should be complemented with an awareness of market noise, caution, and humility.