Yes but stocks have a variety of risks. Specific rick, sector rick, and market risk. The portfolio diversifies out specific and sector risk but leaves market risk.
What does the dividend discount model look like right now?
A thing to consider is by holding the stocks you created a benefit. You created liquidity in the market place when you bought them. Though you didn't finance a new start up the liquidity in the market places existing encourages people to buy stock to support the growth or start up of a company that would be less likely to happen do to liquidity. Your initial purchase allowed someone to exist.
Something productive likely had to happen for the wealth to happen to begin with unless your a hit man or something else. By buying the stock right now you gave up current consumption of the full amount which is anti inflationary. you are rewarded by being able to consume more over and extended period of time but you are still carrying market risk. Just because there is market history does not mean the nation will hold up and there have been some massive dips in the market that meant it would be awhile before your net worth returns and someday it might not.
You could have consumed a whole bunch instead of buying the stock but you delayed your consumption, provided liquidity in the market place and is some people get what they want the government will take it away from you because it is seen as not fair so even that is a risk. If it is to be redistributed you would have been better off to have blown the money all at once, not make the market more efficient by creating the initial liquidity and contributed to short term inflation for those that are jealous of you so you helped in a way keep the poor from losing a bit of buying power and are taking on risk.
Congratulations for that liquidity you added by forgoing consumption to encourage money expenditure in the future for others so they will help a new company come into existence and create some jobs.
A lot of what you are say is explaining how investments benefit the economy by increasing jobs etc. So first of all I just want to say, yes I agree with all of that and I'm not sure I said anything implying otherwise. The point I was making is simply that once you have a vast amount money, it is quite easy to make more money... without having to take major risks, or spend the majority of your time working a normal job.
As for the risks, what lots of people don't seem to understand is it is quite easy to reliably make money off of investments. You just need 2 things: money and time...
Like I said earlier, the market always has good years and bad years with peaks, dips etc... but look at a historical chart for DJIA or any other major index and observe the overall trend. Anyone doing this objectively will conclude that bad years are actually anomalies, and the risk of these bad years is eventually mitigated by time. Choose any starting point and look at what it looks like 40-50 years or later.
This stuff is no secret, everyone has an equal opportunity to make money off of simple investments... but the reason that the average guy doesn't get rich off of them is because he usually doesn't have the luxuries of money or time. Usually 50% of an average guy's income is spent rent/mortgage alone. By the time all his other expenses come out, he does not have much money to put to work for himself. As a result of having little investing money, time is not a luxury the average person can afford... an avg guy might be planning to buy a house, etc and doesn't have time to wait out a crash and therefore may not even be able to take the risk of investing.
In other words, if a guy without much money and time (most people) wants to make the big bucks, he will have to risk a bigger share of his income, and take out riskier positions with better, quicker, payoffs than the simple market index investments or things of that nature. Conversely when you have so much money that your yearly living expenses account for a very small percentage of your income, safe investments are all you need as most of your money is working for you.
