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Another view is that markets are not about gambling but rather investing? For example, index matched funds grow because the economy of the world, as a whole, is
by frozenport 9y ago
Another view is that markets are not about gambling but rather investing? For example, index matched funds grow because the economy of the world, as a whole, is growing.
- randoramax 9y agoThat is the theory. The practice is that markets crash and people cannot retire anymore. A lot like gambling
- imtringued 9y agoMarkets can recover. If you invest in stock you have to consider that you may not be able to liquidate it within the next 10 years. What if the markets don't recover? If they don't recover you will have far larger problems than your stock portfolio being in the red. The machines and people don't just disappear unless there is a war. Even if you fail to do that as long as you have started investing sufficiently early enough - let's say 30 years before retirement (around 35 years old) - you probably have experienced at least one recession and recovery until retirement. If suddenly markets crash during retirement by 50% on an asset that is up by 150% does it matter? You still got away with a profit. And nobody forces you to liquidate everything at once. So sure if you plan to draw out 4% of your stocks you will have decreased your portfolio by 8% every year.
- nihonde 9y agoIndex funds are pegged to a lot of activities that look like gambling, but the risks are somewhat hedged by a limited kind of diversification. It’s like betting every blackjack hand in the house at once (setting aside the house’s favorable odds).
- deleted 9y ago[deleted]
- greglindahl 9y agoHuh? If I have an S&P 500 Index fund, how is that an activity that looks like gambling, or has a limited kind of diversification? It's narrow index funds that are gambling. Not all index funds.