If you look at the S&P 500 from a long-term perspective, it is quite obvious to anyone that it keeps going up. Since 1900 to 2020, the S&P 500 has grown by a tremendous 22,450%. Despite two world wars, two pandemics, and every sort of crisis thrown in, the market keeps rising. And this pattern tends to hold true not just in the U.S., but in many major economies around the world as well including China, Germany, UK, India, Canada, and South Korea. Over the long term, stock markets tend to rise. But why is this so? Before we delve into the reasons, we first need to define what the ‘stock market’ is. When the news anchor reports that the stock market rose 2% today, they normally refer to a stock index. A stock index is essentially a basket of stocks that does its best to represent the overall...