Historically, people who invest in indexed mutual funds like the Vanguard S&P make 5.5%/year above inflation (but, alas! only 1%/year since January 1, 2000); people who invest in actively-managed mutual funds like those run by Fidelity make 4.5%/year above inflation (but, alas! only 0%/year since January 1, 2000); people who actively trade individual stocks turning over their portfolio once year or so as it appears Paul Ryan does make 3.5%/year above inflation (but, alas! only -1%/year since January 1, 2000); and day-traders who trade every day lose 5%/year (and, alas! have lost 10%/year since January 1, 2000).These differences in returns are a lot of the reason that I see it as critical to have a paternalist view on retirement savings. The more involved the individual invester is, the worse that they seem to do in the brave new world of finance. Passive investing, the best option listed, depends critically on individual stocks not going out of balance with the whole (ask any Canadian about Nortal and Canadian stock index funds). But all of the other options are worse.
If the more recent (since 2000) figures are the result of demographic factors and not as a result of "unique" or "unlikely" economic factors (due to the liquidity crisis or what not) then the future of stock market investment is bleak indeed. At the very least, periods of slow growth like this are not good signs for the future.