5 ms·

Index funds would probably do the trick - they are higher risk, but as long as he's living below his means and has a decent emergency fund he should be OK? Espe

Index funds would probably do the trick - they are higher risk, but as long as he's living below his means and has a decent emergency fund he should be OK? Especially since he maintains his employability and could get a 40hr job to pay the bills in a pinch. EDIT: I'm not sure why I'm getting downvoted here, he's talking about investing over a 20 year period - it's not unheard of to value an S&P index fund at 10% over that period!

Marazan 11y ago
Name your 20 year periods where the s&p has given an annualised 10% return
- ZitchDog 11y ago
  https://finance.yahoo.com/echarts?s=VFINX+Interactive#{"customRangeStart":333954000,"customRangeEnd":965106000,"range":"custom","allowChartStacking":true} https://finance.yahoo.com/echarts?s=VFINX+Interactive#{"cust...
  - Marazan 11y ago
    Ah well, if you can just time the largest bull market in history from 20 years out you'll be fine then.
- pinewood74 11y ago
  A whole lot of them. Since inception the median 20 year annualized return is 11.92%. Back out 2% inflation (on average) and you'll see the median 20 year annualized return is 10%.
  - forgetsusername 11y ago
    >Back out 2% inflation (on average) The average annual inflation rate from 1970 is over 4%.
  - Marazan 11y ago
    I don't have the figures to hand but there is no way inflation has been 2% over the period.
    - Marazan 11y ago
      Ha, yeah - using this page ( http://www.moneychimp.com/features/market_cagr.htm http://www.moneychimp.com/features/market_cagr.htm ) The annulaised return of the S&P 500 was 10.82% from 1970 to 1990. Which is grand but doesn't take into account inflation. Adjust for inflation and the annualised return was 4.33% So I am rolling to disbelieve that median 20 year return is 10%
cillian64 11y ago
> it's not unheard of to value an S&P index fund at 10% over that period! It's also not unheard of for shares to double in value over a short period, but you don't know in advance which ones. Quite simply, you are very unlikely to average at least 10% p.a. above inflation on investments over a long period.
- deleted 11y ago
  [deleted]

Marazan 11y ago

Name your 20 year periods where the s&p has given an annualised 10% return

ZitchDog 11y ago
https://finance.yahoo.com/echarts?s=VFINX+Interactive#{"customRangeStart":333954000,"customRangeEnd":965106000,"range":"custom","allowChartStacking":true} https://finance.yahoo.com/echarts?s=VFINX+Interactive#{"cust...
- Marazan 11y ago
  Ah well, if you can just time the largest bull market in history from 20 years out you'll be fine then.
pinewood74 11y ago
A whole lot of them. Since inception the median 20 year annualized return is 11.92%. Back out 2% inflation (on average) and you'll see the median 20 year annualized return is 10%.
- forgetsusername 11y ago
  >Back out 2% inflation (on average) The average annual inflation rate from 1970 is over 4%.
- Marazan 11y ago
  I don't have the figures to hand but there is no way inflation has been 2% over the period.
  - Marazan 11y ago
    Ha, yeah - using this page ( http://www.moneychimp.com/features/market_cagr.htm http://www.moneychimp.com/features/market_cagr.htm ) The annulaised return of the S&P 500 was 10.82% from 1970 to 1990. Which is grand but doesn't take into account inflation. Adjust for inflation and the annualised return was 4.33% So I am rolling to disbelieve that median 20 year return is 10%

cillian64 11y ago

> it's not unheard of to value an S&P index fund at 10% over that period! It's also not unheard of for shares to double in value over a short period, but you don't know in advance which ones. Quite simply, you are very unlikely to average at least 10% p.a. above inflation on investments over a long period.

deleted 11y ago
[deleted]