Bonds actually outperformed stocks for the 30 year period between 1982 and 2011. In the 1800s bonds also frequently outperformed stocks. So it all depends on how the economy is working.
Bonds actually outperformed stocks for the 30 year period between 1982 and 2011. In the 1800s bonds also frequently outperformed stocks. So it all depends on how the economy is working.
Fattttty Bsaasdwss wrote:
green screen Quotrons wrote:
You assume all others were day trading and screwed up. First, on-line trading at A.O.L. with a monthly flat rate free, began circa 1995. Before, 1995, on-line internet was a very expensive long distance call rate for internet service. Before 1995, even so-called discount brokerage firms were expensive. At N.Y.S.E. firms before 1995, day trading commissions would have been outrageous! Second, whales are not in markets to make money. Whales are in financial markets to simply beat inflation. See the discussion on bonds. Peter Lynch was a fund manager from 1977 to 1990. There are thousands of fund managers at one time. If nine-thousand to fifteen-thousand individual fund managers flipped a coin daily for 13 years and the goal were heads, a few fund managers would significantly beat others. During White Water Clinton Investigation, it was discovered that Hillary Rodham Clinton turned roughly $10,000 into roughly $120,000 in less than 18 months (I believe in less than 13 months) trading pork bellies at Chicago Board of Trade. I never see you fellas quoting Rodham Clinton's pork belly trading strategy. It is assumed by most that Rodham Clinton had random good luck. Peter Lynch knows he had random good luck. Peter Lynch and other uber successful traders have been discussed and analyzed at many universities in economics & finance departments.
Nice points. I actually forgot what it was like when he was a fund manager. One of my accounts today is Wells Fargo and I get 100 free trades a year. I can make investment purchases or sales in a matter of seconds. I can't imagine how hard it must have been to complete a trade back in 1980.
Executing a stock trade in 1980s was just like in movie, Wall Street, 1987. We (I'm an older guy) talked to our client. If trade were broker's idea (outgoing call), trade were marked one way. If trade were client's idea (incoming call) trades were marked differently. [The trades were about 5% if brokers idea. If clients idea, about 4%.] Back then, brokers could not enter trades. Brokers only had Quotrons on our desks. We ran across brokerage floor. The cage girls entered the trades.
Mr.Man wrote:
Bonds actually outperformed stocks for the 30 year period between 1982 and 2011. In the 1800s bonds also frequently outperformed stocks. So it all depends on how the economy is working.
Can you provide evidence of this? Bonds have a historical annualized return of about 4.5%. Stocks have a historical annualized return of about 10% with an annualized return of 12% for small caps and add in another 1% for reinvested dividends. Please show me the returns for both for the period you mentioned.
Today you’re slammed into models or index funds with no human making a decision as to the wisdom of timing or price paid. Of course it is cheaper. Let’s see how well this better idea worked at the next market bottom.
Ghost of Igloi wrote:
Today you’re slammed into models or index funds with no human making a decision as to the wisdom of timing or price paid. Of course it is cheaper. Let’s see how well this better idea worked at the next market bottom.
70- to 80% of index funds beat actively managed mutual funds. Why would you want human involvement when their expenses drain off returns? Just doesn't make sense. You want to match the returns of the overall market. You really want to pay someone 2% a year in fees on funds that you owe?
Fattttty Bsaasdwss wrote:
Ghost of Igloi wrote:
Today you’re slammed into models or index funds with no human making a decision as to the wisdom of timing or price paid. Of course it is cheaper. Let’s see how well this better idea worked at the next market bottom.
70- to 80% of index funds beat actively managed mutual funds. Why would you want human involvement when their expenses drain off returns? Just doesn't make sense. You want to match the returns of the overall market. You really want to pay someone 2% a year in fees on funds that you owe?
He was responding to me regarding how we helped our clients decades ago. Front end loaded mutual funds were 6% plus. Clients who did frequent business, we charged them less than 5% per trade. If you know how bond mutual funds are put together, you would know it is better to buy bonds than bond mutual funds, with a smart advisor. Catch: bonds usually are $10,000 at issue. To put together a good bond portfolio, one needs $100,000 to $200,000 just for bonds. There are clients who want greater control of their money. Mutual funds are further away from a client. A client cannot talk to a mutual fund manager unless a client has millions of dollars. There are high rollers who want to be closer to their money than a mutual fund. A client has no opportunity to have input with indices.
green screen Quotrons wrote:
Fattttty Bsaasdwss wrote:
70- to 80% of index funds beat actively managed mutual funds. Why would you want human involvement when their expenses drain off returns? Just doesn't make sense. You want to match the returns of the overall market. You really want to pay someone 2% a year in fees on funds that you owe?
He was responding to me regarding how we helped our clients decades ago. Front end loaded mutual funds were 6% plus. Clients who did frequent business, we charged them less than 5% per trade. If you know how bond mutual funds are put together, you would know it is better to buy bonds than bond mutual funds, with a smart advisor. Catch: bonds usually are $10,000 at issue. To put together a good bond portfolio, one needs $100,000 to $200,000 just for bonds. There are clients who want greater control of their money. Mutual funds are further away from a client. A client cannot talk to a mutual fund manager unless a client has millions of dollars. There are high rollers who want to be closer to their money than a mutual fund. A client has no opportunity to have input with indices.
That was true a long time ago but now you can buy mutual bond funds and target retirement funds cheaply with very low expense fees which are a mixture of stocks and bonds which get more increasingly with bonds as your retirement nears.
https://investor.vanguard.com/mutual-funds/list?mgmt=i&filterFiftyThousandAndUp=true#/mutual-funds/asset-class/month-end-returnsThere is no price discovery. I think you are misguided in thinking index funds are the answer. Apple has one of the largest weightings in most index fund. The earnings of the company is 4% higher than five years ago, the debt is 40% higher and the stock has gone from $125 to $300. Same could be said for many of the index story stocks. A rational person would say that doesn’t make sense. Only explanation is this is a massive Fed induced bubble. Your index funds are about to get sh*t canned.
Ghost of Igloi wrote:
There is no price discovery. I think you are misguided in thinking index funds are the answer. Apple has one of the largest weightings in most index fund. The earnings of the company is 4% higher than five years ago, the debt is 40% higher and the stock has gone from $125 to $300. Same could be said for many of the index story stocks. A rational person would say that doesn’t make sense. Only explanation is this is a massive Fed induced bubble. Your index funds are about to get sh*t canned.
My index funds are up about 500% over the last 10 years. Even if they took a hit of 50% in the next year they are still up over 250% over the last 10 years and they would recover back to that 500% level. What other investment comes close to that?
Fattttty Bsaasdwsss wrote:
Ghost of Igloi wrote:
There is no price discovery. I think you are misguided in thinking index funds are the answer. Apple has one of the largest weightings in most index fund. The earnings of the company is 4% higher than five years ago, the debt is 40% higher and the stock has gone from $125 to $300. Same could be said for many of the index story stocks. A rational person would say that doesn’t make sense. Only explanation is this is a massive Fed induced bubble. Your index funds are about to get sh*t canned.
My index funds are up about 500% over the last 10 years. Even if they took a hit of 50% in the next year they are still up over 250% over the last 10 years and they would recover back to that 500% level. What other investment comes close to that?
Those same index funds have annualized little better than 5% the past 20 years. And that is looking back from a bubble high.
Good luck though.
Nobody owns Barry Bonds. MLB and the federal gov't tried to put him in jail but never succeeded. Best home run hitter ever!!
Ghost of Igloi wrote:
Fattttty Bsaasdwsss wrote:
My index funds are up about 500% over the last 10 years. Even if they took a hit of 50% in the next year they are still up over 250% over the last 10 years and they would recover back to that 500% level. What other investment comes close to that?
Those same index funds have annualized little better than 5% the past 20 years. And that is looking back from a bubble high.
Good luck though.
We all know the market is overvalued. It's been overvalued for years.
Let's see your portfolio of puts, shorts and cash then.
Bad Wigins wrote:
bonds get mixed in wrote:
why would some schmuck off the street be able to guess this stuff? Unless they play the stock market like a casino.
I don't know, could it be a bunch of US companies now have access to Chinese, Canadian and Mexican markets they didn't have before and stand to gain value? How is that a matter of luck?
A casino stacks the odds in favor of the house. A stock market is the reverse, you might lose but odds are you'll win.
My point is, there is a ton of uncertainty about which tariffs will be implemented and when. Trump keeps pulling back certain tariffs and adding others. The uncertainty is what makes this game like a casino. You could win big, or that tariff might never materialize, or a different tariff might materialize. I don't like to play games like that. They are changing weekly. Anyone who claims to know how to successfully exploit this mechanism is lying.
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