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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Feb 1, 2019 - 04:54pm PT
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As one of the accused long-term stock market bulls here, I guess I’d better type something.
Back in the 1990’s, I thought I knew a fair amount about how the stock markets worked, & I mostly invested in individual stocks & occasionally in a high-fee mutual fund that looked “hot.” It took me up to the early 2000’s meltdown to realized I’m a crappy investor, like most investors are, despite their opinion of themselves.
I learned some stuff along the way & lost some substantial money on a few stocks. Yeah, & I did well enough on others that I didn’t end up as a BOI (Bitter Old Investor).
After 2003, the majority of Heidi & my savings went into low-fee Vanguard Mutual Funds. Some of those worked well, some did not work as well, & some I have exited.
Here’s 2 snipes of my original post on this thread about our long-term investment income, & earlier Vanguard holdings.
And here’s a snipe of my post on the subject on Jan 1, 2019.
I mostly stopped talking stocks with friends in the last century. I have discovered in real life, & on this thread, that a fair number of people are very bitter about the stock market. Perhaps that is due to previous bad financial experiences in the markets, or other reasons that seem valid to them & make them want to dispute we giddy stock market bulls.
So be it. Other types of investments work for some folks, or not.
Carry on
& remember Moosedrool’s post on inflation vs returns on the S & P 500 Index, with those all-important dividends reinvested.
If you calculate for the last 20 years, your investment will show an increase of about 150%, while the cumulative inflation is only 54%.
Which means, your buying power has increased by 60% after factoring inflation.
For a tax deferred investments (like 401k) that number would be higher, of course.
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formerclimber
Boulder climber
CA
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Fritz, I already mentioned that inflation calculators don't show anything close to real increases in price of housing, medical, food, etc.
Sorry but it's true. But keep believing in rainbow unicorn, guys, it's your right.
Don't take it personal, no one "accused you of being a bull" - permabulls comment was a response to derogatory comments by others about those who expressed bearish sentiments.
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Feb 1, 2019 - 05:39pm PT
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former climber: Donald Trump used to agree with you that
inflation calculators don't show anything close to real increases in price of housing, medical, food, etc.
Then he became President, & he's gud with our official inflation figures, since they suit his new agenda as an insider.
I'll take the official inflation figures over your anecdotal memories, since I trust the institutions more than individual memories of killer inflation, since the 1990's.
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Feb 1, 2019 - 05:44pm PT
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I just had a "Duh" moment. I now realize formerclimber is the author of the "Should I return to Russia/is America gone bad beyond hope thread on ST.
Well folks, get your popcorn, cause he ain't even started yet here.
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formerclimber
Boulder climber
CA
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Personal attack is all what people of your level are capable of: speaks volumes about....you. All that you can do, when you can't agree with someone.
Don't get too much popcorn, it's bad for blood pressure considering your age. You find anything funny with a person wanting to live simple life...or my dual nationality? It might turn out that I'm more educated than you (or that my parents made a lot more money than you ever did on your mutual funds).... so don't choke on that popcorn.
Also, speaks volumes...about you...that you assume that everyone is a he...I'll give you another one: you can also use gender to try to demean.
Would be not too comfy reaching for popcorn if I was an African, or Israeli, I mean based on that? Yeah, that's right.
By the way, look up US debt increase, including debt/GDP ratio....how do you think they're going to get rid of it? Yep, by devaluing these investments and printing more dough. Last time such debt bubble was before WW2. But seems like you well-set retirees don't care about real situation, of course...cause you hope it's the younger generations who'll bear the consequences. Boomers just keep running the credit card...and s&p will always track the high fantasies.
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Feb 1, 2019 - 06:50pm PT
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formerclimber:
I defer to you, since you are a true ST nattering nabob of negativity. There is nothing productive in arguing with you. You win. Now leave, not that you would be happy with anywhere you went.
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formerclimber
Boulder climber
CA
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^ Personal attack folks and bigots like you are always one trick ponies.
I bet you can't even understand anything stocks beyond "mutual funds", haha...speaking of one trick ponies (and soo defensive about certain index...I wonder why)
May be you leave....I, for sure don't want to come in touch with dirt and uneducated hate like what's coming out of your mouth, would have to take a shower after hearing what ones like you are spewing.
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briham89
Big Wall climber
santa cruz, ca
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It's nothing but a speculative bubble growth
To try and steer this back towards an investment discussion...
as a young person just starting out and trying to save towards retirement someday, what would you suggest? Seems you're anti S&P indexing, so what is your alternative suggestion?
By the way, look up US debt increase, including debt/GDP ratio
That is quite an interesting one. I've been reading quite a few different view points on this and am still digesting it.
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AKDOG
Mountain climber
Anchorage, AK
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More American own their homes that own stocks
The richest 10% of Americans own 84% of all stocks.
If you cannot tolerate risk you should avoid the stock market all together.
But for some it can be very rewarding.
IMO one basically looses all credibility when you mention swing trading as being a viable strategy for most investors.
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john hansen
climber
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Briham , I would suggest maxing out your 401K at your workplace every year or an IRA if your work does not offer one. What you put in now will be worth 3 times more in 30 years.
Put it in a targeted fund or any thing but keep stashing away money every month and every year.
Just keep buying and holding and over time you will make gains.
I wish I had started at 30.
And as other's have said if it goes so bad that people are fighting in the streets and money is worth nothing then we are all fuked no matter what we owned on paper.
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Roger Brown
climber
Oceano, California
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My advice to a young person would be to put a down payment on a house and pour all extra income into paying it off before you retire. After paying ours off we went for a couple big remodels and now in retirement it is just the way we want it with no house payment. Santa Cruz would be a great place to own a home free and clear. Just my opinion:-)
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briham89
Big Wall climber
santa cruz, ca
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Santa Cruz would be a great place to own a home free and clear. Just my opinion:-)
Hi Roger, I would LOVE to do that , but with the median home price in Santa Cruz now being $985,000 it seems near impossible. The only way I see making it work is commuting over hwy 17 every day (which I currently do) and I really don't want to do that for the rest of my life.
My wife and I have been looking at more affordable places to live, and it seems to point to out of CA. Buying a house is a big priority / goal of mine.
Briham , I would suggest maxing out your 401K at your workplace every year or an IRA if your work does not offer one. What you put in now will be worth 3 times more in 30 years.
Great advice John. This is more or less what I have been doing for the last 4 years (29 now).. I unfortunately don't have a workplace supported 401K, so I have been maxing out a roth ira plus putting more into a general brokerage account. I have been using a Vanguard target retirement fund for the bulk and buying individual stocks in small amounts. The individual stocks have been really good and really bad which is pretty much equalling out to nothing. The target retirement account keeps chugging along, but seems to underperform the market, which is making me think about diversifying this with a S&P 500 value and S&P 500 growth ETFs (interested in others too) to have a bit more exposure to equities since I have so much time in the market to go.
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formerclimber
Boulder climber
CA
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My estimate of real inflation of dollar buying power -- for core consumer/housing/non-luxury expenses, based on 1) prices I personally recall from 1998-1999 from more than one location 2) stats found is around 5.5% per year. Around 3X loss of purchasing power.
S&P 500 index tracking over the last 20-21 years had been -- depending on entry point -- been between 5-5.8% per year (dividends reinvested, not inflation adjusted). Not very impressive 20-year returns considering real loss of purchasing power.
Official inflation and or CPI estimates are around 2.2% per year, on average, for this period/last 20 years . The latter come from manipulated and inaccurate numbers meant to make government look good and to make economy look better than it is. Around 53% percent of total inflation. The latter is what's used by "adjust for inflation" function of various investment calculators. This is just BS making investors feel better.
I came across this "real consumer price inflation" estimate today: find it roughly matches my own earlier approximation of 5.5%/year (higher than my estimate):
Of course if someone a) had already invested in their house b) has capping on healthcare expenses such as may be some sponsored/discount health policy with heavy coverage (and plans to never go to school again) they're less susceptible to these price increases.
It's more of a hedge against inflation from passive index tracking rather that turning profits...sorry, this is the reality.
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briham89
Big Wall climber
santa cruz, ca
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Former, my question still stands based on your info what is your suggestion? Give up?
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formerclimber
Boulder climber
CA
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Former, my question still stands based on your info what is your suggestion? Give up?
I haven't read your earlier post because of escalation that happened here.
I'm simply making my point that index tracking had been an inflation hedge versus "growth" of investment.
Give up? On what? On life?...on investment...on stocks ...on money?
Not sure since when "not investing in tracking S&P" = "give up". May think of percent allocation for index tracking, calculate future risk vs. profit ratio, etc. Risk of not just s&p drop but big devaluation of money risk.
I believe in actively self-managed investing (and trading, if one's up to it).
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briham89
Big Wall climber
santa cruz, ca
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I believe in actively self-managed investing (or trading, if one's up to it).
10-4
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EdwardT
Trad climber
Retired
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I believe in actively self-managed investing (and trading, if one's up to it).
What has been your overall ROI for the last 10 years? Last 20?
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Fritz
Social climber
Choss Creek, ID
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Topic Author's Reply - Feb 2, 2019 - 02:25pm PT
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briham99! I think you are doing great. Keep it up, & try to ignore negativity specialists.
The investment & internet world is full of both BOI's (Bitter old investors) & Russian trolls, who get paid gud money to unsettle American confidence.
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Roger Brown
climber
Oceano, California
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Moose,
On the remodel part, I forgot to mention that I am a carpenter by trade so most of our expense was for materials. The labor was provided by us. My wife got really good at the drywall finish and painting:-) We did contract out the plumbing and the electrical. We are up around 3 times our total investment. We paid it off early and it was so nice to have all that extra money to invest without worrying about the risk as much. It worked for us but for sure the remodel part is only an option for the right situation. The house started out tiny at only 600 square feet.
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blahblah
Gym climber
Boulder
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The target retirement account keeps chugging along, but seems to underperform the market, which is making me think about diversifying this with a S&P 500 value and S&P 500 growth ETFs (interested in others too) to have a bit more exposure to equities since I have so much time in the market to go.
If you buy S&P 500 value and S&P 500 growth, you are essentially just buying S&P 500! It's not any worse, but not any better--what's the point? (There may actually be an answer for tax reasons if you want to mix up your portfolio in the future for whatever reason, but I'm very skeptical it would be significant for a typical investor.)
I'm just noting this to illustrate a point: many people seem to have a hard time accepting that buying a small number (perhaps one) of index funds is all that is necessary (and desirable) for a long term investment portfolio. This need to overcomplicate things has no benefit, and may have some costs.
Here's an article that succinctly expresses my views (no guarantee that it will lead to good results in the future of course):
https://www.wallstreetphysician.com/building-vanguard-three-fund-portfolio-simple-index-fund-portfolios/
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