Perhaps these people should try to move to Russia or China or Japan
Important video: https://www.youtube.com/live/1f5wtWFLGKs?feature=share&t=1734
TL;DW: If you multiply many randomly permuted sequences like this Principal x (1 + .05) x (1 + .50) x (1 + .05) x (1 - .50) x (1 + .05) x (1 + .05) x ….. and plot each path it much more accurately shows how your investment behaves, than if you just average (.05 + .50 + .05 - .50 + .05 + .05) / 6 = .033, and then calculate Principal x (1 + .033) x (1 + .033) x (1 + .033) x (1 + .033) x (1 + .033) x (1 + .033) x ….. Because the latter assumes returns which are close to average of past returns. But the former assumes many different paths the compounding can take, some of which can ruin you.
And the key insight of the video is that by analyzing the random permutations like Principal x (1 + .05) x (1 + .50) x (1 + .05) x (1 - .50) x (1 + .05) x (1 + .05) x ….. it is clear that by just avoiding those (1 - .50) you have a better chance of getting a better investment outcome than trying to get a (1 + 1.0) in that sequence somewhere.
