Down goes the Dow

Gonna Have to Call BS wrote:

K5 wrote:

Mathematics

Gonna have to call BS. Mathematicians are the most rational people on the planet. You, on the other hand, ahem...

You effin lemmings believe in "the magic of the market" and question my rationality! Now that's rich.

K5 wrote:

You effin lemmings believe in "the magic of the market" and question my rationality! Now that's rich.

Magic? Who said anything about magic? Retract your lie immediately. I do not believe in any form of magic, but I have observed the ability of publicly traded/financed corporations to effectively generate revenue, record profits, return dividends, and pay bonds.

K5 wrote:

I notice you rather conspicuously left out the years 1929 - 1940.

I notice you conspicuously left out the years 1940 to 1945.

I notice that you (and others) have left out the last 15 years (that part that really matters) where the SP500 return with dividends reinvested comes to a whopping 4.42% annually. That's why people who actually follow this mutual fund con job to buy and hold mutual funds can't afford to retire.

K5 wrote:

Gonna Have to Call BS wrote:

Gonna have to call BS. Mathematicians are the most rational people on the planet. You, on the other hand, ahem...

You effin lemmings believe in "the magic of the market" and question my rationality! Now that's rich.

I don't question your rationality. Your irrationality is plain for all to see.

coach d wrote:

I notice that you (and others) have left out the last 15 years (that part that really matters) where the SP500 return with dividends reinvested comes to a whopping 4.42% annually. That's why people who actually follow this mutual fund con job to buy and hold mutual funds can't afford to retire.

Who's retiring after only 15 years?

coach d wrote:

I notice that you (and others) have left out the last 15 years (that part that really matters) where the SP500 return with dividends reinvested comes to a whopping 4.42% annually. That's why people who actually follow this mutual fund con job to buy and hold mutual funds can't afford to retire.

fine, but starting in 1999 is not fair - why not show 30 or 40 year returns since that is an investing lifetime? That number would be up around 10% I'm sure.

agip wrote:

coach d wrote:

I notice that you (and others) have left out the last 15 years (that part that really matters) where the SP500 return with dividends reinvested comes to a whopping 4.42% annually. That's why people who actually follow this mutual fund con job to buy and hold mutual funds can't afford to retire.

fine, but starting in 1999 is not fair - why not show 30 or 40 year returns since that is an investing lifetime? That number would be up around 10% I'm sure.

Neither of these make that much sense to use.

If you want to talk about what is reasonable to expect in the future (since that is what is relevant when considering what opportunities you will have) then the only reasonable number to use is the average return for as long as decent records have been kept (1926 - today).

If you want to talk about whether or not folks can afford to retire today and what the market's role has been in that then this is a more complicated and individual calculation but it is NOT simply the average over the investing lifetime of the given individual. The returns of later years must be weighted more heavily for most people because returns during those years will have a larger impact on their wealth.

K5 wrote:

You out money into it and you don't know how it will grow or shrink.

How is that not gambling?

How is investing in real-estate not gambling?

How is sticking your money in a mattress not gambling?

Is this K5 the same K5 who writes all those antisemitic ramblings of a crazy person that make no sense?

K5 is the dumbest poster ever on this board.

dumb wrote:

Now look, don't be ridiculous. K5 has clarified this point many times (obviously, you must be stupid and illiterate). If your money is sitting in a bank rotting away to inflation while everyone else makes capital and dividends investing, THAT IS NOT LOSING MONEY. It's only losing money if the market goes down a few percent for a week or a month. It doesn't matter what happened before then, that is REAL MONEY and REAL LOSSES.

So, by your logic, you just lost 200% of your money last week.

Why? Because a guy at the gym I go to bought a penny stock and sold it after it tripled in 4 days. 200% gain. You missed out on that while your money was rotting away in your mutual fund investments gaining a couple of percent.

See how stupid your argument is? But that is exactly what you opportunity cost "loss" aruguers are saying.

stewy wrote:

coach d wrote:

I notice that you (and others) have left out the last 15 years (that part that really matters) where the SP500 return with dividends reinvested comes to a whopping 4.42% annually. That's why people who actually follow this mutual fund con job to buy and hold mutual funds can't afford to retire.

Who's retiring after only 15 years?

Work on your reading comp. No way one should conclude what you did from what he wrote.

I retired in 10, though.

fine, but only partly true.

remember that portfolios are not static through a lifetime.

Meaning the same percentage of stocks at age 65 as at 40.

Most people become much more conservative when they get within a few years of retirement, so they own less stock.

so the movements of the stock market might have less zing on a portfolio in your 60s even though you have more money then.

bueler wrote:

stewy wrote:

Who's retiring after only 15 years?

Work on your reading comp. No way one should conclude what you did from what he wrote.

I retired in 10, though.

I made no conclusion. I asked a rhetorical question to make a point. See agip's post after mine for more.

Klondike5 wrote:

Itchy finger wrote:

It "feels"? Is that your usual investment strategy?

It worked damn well in 2008 when I got out of the market and avoided about 85% of the meltdown

And where is the Dow 6 years later? Anyone that didn't sell is still making a long-term profit.

If the Dow drops 30% today and recovers by half that in the short-term, then pays out the average return since 1896, I'll still be able to afford to retire at 59.

If it doesn't recover in that timeline I'll have to work a couple more years.

I have enough alternative investments to hedge a crash.

My riskiest investment is in my real estate.

How much net worth do you feel you need to retire at age 59?

How is that split among liquid and non-liquid assets.

I would say you need at least $3 million in after tax liquid assets...unless we begin to see the return of actual interest payments on safe fixed income products.

Yes, reals estate can be risky. But perhaps less so than equities and bonds. They aren't making any more real estate. The Fed prints up money from nothing

Compound return on financial investment since 1926 versus inflation

Dow - 9.6%

S&P 500 - 9.8%

Government bonds - 5.7%

Treasury Bonds - 3.5%

Inflation - 3%

That's a good point.