3 ms·
not really that surprised; despite the razor thin margin I think most people (myself included) thought a Leave majority was just incomprehensible. I've just ret
by Wonnk13 10y ago
not really that surprised; despite the razor thin margin I think most people (myself included) thought a Leave majority was just incomprehensible. I've just returned from a month in London - this has been a good learning experience for me in terms of how my personal biases help rationalize expected outcomes. And also why I just throw money at passive index funds - I'm not experienced enough yet to gamble on these sorts of things.
- Someone1234 10y agoHere's a legitimate question, have index funds ever "crashed?" If you look at the last ten years, they didn't do well during the recession years, but over the entire period either matched or exceeded most managed funds but without nearly as high of a fee. People act like index funds are a "risky investment" compared to bonds. But is that actually true? Seems like countries getting into trouble is so common now that bonds aren't as rock solid as they used to be, and over tens of years index funds have shown to be extremely stable.
- skybrian 10y agoConventional wisdom is that they are risky if you might need to sell right away. Not so much if you're going to hold for 5-10 years or more.
- loeg 10y agoI've always heard 20 years. Look at stagflation in the US in the 70s.
- loeg 10y agoIndex funds crash whenever the market does. In 2008/2009 they were down 50% just like the indices they track.
- nabla9 10y agoRisk is an umbrella term. The risk we are talking here is risk according to the modern portfolio theory. It's the variance of a portfolio. Index funds spread the risk across multiple stocks, to reduce variance. Stock markets have overall greater variance than bonds, so the risk of index funds is is higher than bonds. The risk decreases with time. This is why you should see index funds as long term investment. In 10-15 year time period total return of index funds is relatively low risk. There are other risks in all financial investments. Variance is not the only one.
- berberous 10y agoIndex funds just reflect the entire market. The stock market crashes frequently, e.g. 2001, 2008, etc. In a bad crash, you could lose 50+%. And there's no guarantee of a swift recovery: in Japan, levels have still not recovered to the pre-1991 highs. With bonds however, if you are buying a high credit quality bond, you will almost certainly get your money back at maturity (in the interim, the price can decline due to changes in interest rates). With a long enough investment horizon however, being invested in the entire US stock market has historically worked out very well, and should hopefully continue to do so in the future barring very extreme destabilizing world events. You should get growth that you cannot achieve with bonds. So it all depends on your time horizon (e.g. longer than an economic cycle) and risk appetite (appreciation vs. maintaining principal).
- larksimian 10y agoIf you are retired then in order to cover expenses every month you either a) sell assets b) receive payments from assets. If you are invested in an index fund and the market nose dives for 20 months you don't have the luxury to wait until it recovers. You are forced to sell at 30-40-50% lower values while the slump lasts. This translates to burning through your nest egg at 1XX% the rate you 'normally' would for the duration of the slump.
- branchless 10y agoalso london was heavily remain, you were in a remain bubble compared to the rest of the uk.
- gadders 10y agoIt was 60/40 in favour of remain. Not all that heavily.
- jonknee 10y agoIn terms of elections, 60/40 is a landslide.
- branchless 10y agoSure, but this was far higher than outside london.
- Avshalom 10y agoWell compared to the rest of England and Wales.