What is a realistic return on value investing?

[corydorus]

Hi,

Personally, I will think it should be higher than the 7% (The long term return of S&P 500 is 7.6%. See this. By going passive and buy a low expense etf, the return should be at least 7%)

Value investing in theory should outperform a passive investment method, as it is active management of portfolio.

Well, if we include dividends to S&P ... that's 9% ? I am not saying the index is good or not. And whether is past performance can indicate S&P future, i think we need to consider deeply. When i look at the chart, there are two waves of exponential gains.

1982 - 1995 Ramp up of S&P
1995 - 2001 Exponential Growth of S&P

Which doesn't seem sustainable as it will almost vertical growth if there will be a 3rd. After 2001, S&P in a up/down mode if you have hold across that period till now, hardly moves much for past 14 years with 50% fluctuations. If we consider Income has not been linear to growth, the future is unlikely to see this 2 waves of gains less hyper-inflation or scenario that can breaks this logic.