Final answer:
Michelieu assures a client of his good service and past performance, despite lacking a long-term track record, highlighting equity-oriented clients' average total returns. Reflecting on investment trends, it is noted that many investors struggle to surpass market averages, emphasizing the importance of risk and return considerations.
Step-by-step explanation:
Michelieu informs a prospective client that although he lacks a long-term track record, he is confident that the client will be very satisfied with his recommendations and service. Detailing his performance, he notes that in the three years he has been in business, his clients with equity-oriented portfolios have seen a total return averaging more than 26%. This statement reflects a common understanding in the investment world that while it is possible to succeed for a number of years in a row, the majority of financial investors are unable to consistently outperform the market. In fact, looking at historical data, it's evident that many mutual funds that aim to pick outperforming stocks often achieve lower returns than the market average. Furthermore, the concept of risk and return is critical, particularly in the context of an investor's stage in life, with young workers often being better positioned to endure the volatility of the stock market, potentially achieving higher returns over a longer period.