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Betting on the stock market (mutual funds) over timescales in decades is about the least risky thing you can do. You don't need a 5% return every year (that wo
by andyv 8y ago
Betting on the stock market (mutual funds) over timescales in decades is about the least risky thing you can do. You don't need a 5% return every year (that won't happen), you just need it to be the average.
- likpok 8y agoThere is a difference here because you need to draw on your funds. The math works out well for someone willing to buy and hold for a long time, because if there's a crash you wait to sell until the market has recovered. However, if you need to sell, you need to actualize the losses. Even if your portfolio later recovers, you've lost out on the growth that you would have had.
- andyv 8y agoSure, during a crash you have to draw down. But in a 10% growth year, you can get it back. Averages.