Are you saying that you should look at the probability distribution of returns, rather than only the mean of that distribution? A 1.00 chance of a 1.0%-inflation real return is significantly different from a coin flip with 0.50 chance of losing everything and 0.50 chance of 102%-inflation real return, even though their expected values are equal.
Perhaps we should instead assign a utility function to rate of return; it’s entirely reasonable that the utility difference between a 500% return and a 600% return is much smaller than the difference between losing everything and keeping what you have.
Are you saying that you should look at the probability distribution of returns, rather than only the mean of that distribution? A 1.00 chance of a 1.0%-inflation real return is significantly different from a coin flip with 0.50 chance of losing everything and 0.50 chance of 102%-inflation real return, even though their expected values are equal.
Perhaps we should instead assign a utility function to rate of return; it’s entirely reasonable that the utility difference between a 500% return and a 600% return is much smaller than the difference between losing everything and keeping what you have.