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Sorry, but I'm not understanding your point. Index funds are almost no trouble at all. People harping on index funds typically suggest something akin to 'inve

Sorry, but I'm not understanding your point. Index funds are almost no trouble at all. People harping on index funds typically suggest something akin to 'invest in an S&P 500 index fund and let it sit for 35 years.' So all you have to do is buy the shares and leave them there. If it's in your 401(k) then it can be essentially automated. We have a long history of data that suggests that in the long run the stock market is the good investment to get returns from. Picking an index fund protects you from one of the companies in the index going to zero and removes the randomness of stock picking from the equation. Considering returns compound, even modest returns are better than just sitting in cash. What would you suggest as an alternative?

Applejinx 8y ago
If the system breaks, returns don't compound. That's an assumption that our whole system is defined on, but globally the amount of leverage on money is astronomical. Basel III set it to 3% (I'm aware the US is either 4% or 5%) Returns don't compound if it's all made up of fairy dust and repeatedly bailed out by issuing more money to do quantitative easing. That's a sign of trouble, and harmed societies all over the world. You can't just keep bailing the banks in order to make sure 'returns compound'. At some point it's too ridiculous and things break.
- skh 8y ago
  If things break as you say then it won’t matter what you’ve invested your money in. In such a scenario the investments that pay off are in knowledge that others find useful and physical fitness.
bryanlarsen 8y ago
"We have a long history of data that suggests that in the long run the stock market is the good investment to get returns from." But that data is cherry-picked, as far as I'm concerned. It's only using about 100 years of American stock market performance. During those 100 years American stock exchanges changed from hosting regional companies to hosting the largest international companies. Obviously that same market growth cannot recur over the next 100 years; once you're at #1 you can't go higher. So a true measure would be a basket of stock markets. And that basket 100 years ago would have included a large portion in the Frankfurt Stock Exchange, whose history has not been as favorable as the NYSE...

Applejinx 8y ago

If the system breaks, returns don't compound. That's an assumption that our whole system is defined on, but globally the amount of leverage on money is astronomical. Basel III set it to 3% (I'm aware the US is either 4% or 5%) Returns don't compound if it's all made up of fairy dust and repeatedly bailed out by issuing more money to do quantitative easing. That's a sign of trouble, and harmed societies all over the world. You can't just keep bailing the banks in order to make sure 'returns compound'. At some point it's too ridiculous and things break.

skh 8y ago
If things break as you say then it won’t matter what you’ve invested your money in. In such a scenario the investments that pay off are in knowledge that others find useful and physical fitness.

bryanlarsen 8y ago

"We have a long history of data that suggests that in the long run the stock market is the good investment to get returns from." But that data is cherry-picked, as far as I'm concerned. It's only using about 100 years of American stock market performance. During those 100 years American stock exchanges changed from hosting regional companies to hosting the largest international companies. Obviously that same market growth cannot recur over the next 100 years; once you're at #1 you can't go higher. So a true measure would be a basket of stock markets. And that basket 100 years ago would have included a large portion in the Frankfurt Stock Exchange, whose history has not been as favorable as the NYSE...