#61
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Index funs are relatively safe and easy...but there's no intelligence built in. They just track specific segments, in the same way the wind vane tracks the wind. Again...no intelligence, just physics (or simple math.) I'm not against index funds...they are a good investing vehicle for most people who are willing to put just a bit of effort in...but they are hold no intelligence.
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Colnagi Seven Sampson Hot Tubes LiteSpeed SpeshFatboy Last edited by C40_guy; 03-21-2024 at 06:49 PM. |
#62
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Read some Bogle. He proves it over and over with stats. Sure, you may get lucky and get in early on the next Cisco or Apple or Tesla, but then you have to time your exit well. Apple almost vanished, Tesla is shaky as hell, and hey, remember GE, the greatest company ever? I don't care how smart you are, the average schmoe doesn't have the knowledge or time to do all this.
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It's not a new bike, it's another bike. |
#63
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As an economist, with an understanding of group psychology, I know why markets (and therefore index funds) move. It has nothing to do with facts. More importantly there's ZERO reason for you to inject your political biases into this conversation. That's simply rude and uncalled for.
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Colnagi Seven Sampson Hot Tubes LiteSpeed SpeshFatboy Last edited by C40_guy; 03-22-2024 at 05:20 AM. |
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Oh my. Sir, it's not a political bias. I believe all politicians are corrupt. Both parties. It's plain to see. Some just more than others. But, back to the matter at hand. What's the secret sauce to beating the benchmarks? Have you personally done it on a consistent basis, or found somebody who has in your studies?
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It's not a new bike, it's another bike. |
#65
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An issue with stock indices is that they are not risk profiles, especially ones that are market-cap based. As well noted, the current market is highly concentrated - 10 stocks comprise 29% of the overall equities market. That's is a high amount of risk and would not be appropriate for investors with a low risk tolerance. Remember, in the 2001 dot com recession, the S&P 500 had negative for three consecutive years (-9% in 2000, -12% in 2001 and -22% in 2002) and lost 37% in 2008. It takes a long time to recover from such a loss if you can't contribute anymore (being retired) to your portfolio.
Picking an appropriate benchmark for your risk tolerance is important. Timing and investment horizon are also important factors. Large institutions like insurance companies and pension funds have custom benchmarks to achieve a risk-adjusted return. This is where a good investment advisor can help devise and maintainan appropriate plan that will change over time as the investors' needs change.
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My Bikes |
#66
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Ok, to use post '08 as an example, what's your alternative? Interest rates went to zero, RE was battered, but, in hindsight, was an amazing opportunity, but nobody wanted to dive into that pool besides the bold. You just had to turn off the noise, relax, and take a bike ride or something. It all came back. This happens a lot. At least it wasn't 29 until the fifties. That was bad. But, over time, you're going to see about 6% growth in equities, and that's going to keep you ahead of inflation, with change to spare. But, in the long run, we're all dead, as Keynes said. So, enjoy yourself.
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It's not a new bike, it's another bike. |
#67
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We seem to oversimplify everything in these threads.
The reality is almost all of us should have a little bit of everything mentioned. Nobody should be almost all-in on anything. And the mix is not static over time, it needs to change as your income changes, as your savings change, as your age changes, as the market changes, as the tax laws change, etc.. It is definitely really complicated, that's why there is a market for professionals. |
#68
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Also, most of the US has woefully under-saved. The median retirement savings for 55-64 is $185K and for 65-74 is $200k. And many still have mortgages. An all equity portfolio in 2008 is a killer. But if you had bonds prior to 2008 recession, the price of the bonds went up and could have been sold at a gain. Plus bonds don't change price in double digits unless there is a significant increase in default risk and Treasuries almost always gain due to the flight to safety.
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My Bikes |
#69
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What is a good online retirement calculator?
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Bingham/B.Jackson/Unicoi/Habanero/Raleigh20/429C/BigDummy/S6 |
#70
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I got nailed a few years ago with too many bonds in my bag, when interest rates jumped. That was a rare event, and there were some people warning about that before hand. I'm older and a 60-40 guy (actually 70-30), so, don't feel too bad. I mean, it's not as though I was in Bitcoin. But, now we are back to a time when you can get government backed 5% on a bond or CD, and that's actually much healthier than ZIRP, if you ask me.
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It's not a new bike, it's another bike. |
#71
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Not to be snarky, but a calculator that calculates what?
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#72
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she said: "You will never beat the market because you do not have access to the information I do so put your money in Vanguard Index Funds [retirement and taxable investment accounts] and never sell until you retire. Do not trade. Just buy and keep buying until you retire and need the money".
This is the money line here. Low expense, low complication system. The people who do keep "beating the market" are getting an edge somewhere (legally or illegally...). You basically pay to get part of that edge (and then you have to know whose edge is consistently right) or are a boat on the rising tide which unfortunately does require time to ride out the troughs in returns. There is no free lunch. We have some real estate investments with good cash flow but my wife actually has to work to make it perform. You can read the recent NYT article but how an initially lucrative passive RE option (high dividend stream, luxury college student housing) blew up due to pandemic or maybe operator issues (the guy managing the RE). https://www.nytimes.com/2024/03/18/b...investors.html Quote:
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#73
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The Charles Schwab Magazine Spring Issue has a good article on charitable annuity plans as some of us discussed above.
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#74
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I've built an excel spreadsheet with income streams and expense streams and need to integrate taxes into it, to calculate cash flow and net assets. But it won't be as sophisticated as one that one of the financial services companies use, so I'd like to see if there is one online for free I can use, if only to see if the one I built is giving robust results. I can vary inflation, Social Security COLA, ROI on my assets to see the results.
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Bingham/B.Jackson/Unicoi/Habanero/Raleigh20/429C/BigDummy/S6 |
#75
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Not all index funds are good. It depends on the index. S&P 500 and Total Stock Market funds are good (probably the best as far as index funds go). Others not so much. I had a lot of money in a Vanguard Value Index Fund (VVIAX) because my Fidelity Rep said to put money in value funds vs. growth funds. the 1 yr return was S&P 500 24%, VVIAX 9.5%. I don't think the Russell fund indices are very good for returns either. Bond index funds were disappointing for me as well. Basically, long term, you can't beat the S&P. I think I could have doubled my money over decades of investing if I just invested in an S&P 500 fund vs. spreading my money out over others which did not return as well. YMMV
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