4 ms·

So far, the peak-to-trough and peak-to-current performance is typical of any significant past recession. That is, while the coronavirus may not have been predi

So far, the peak-to-trough and peak-to-current performance is typical of any significant past recession. That is, while the coronavirus may not have been predictable, a 30-35% equity market drawdown at some point was not only predictable, it was guaranteed. Statistically, it might have even been likely to have happened sooner — the 2010s was the only decade without a US recession and bear market period.

dredmorbius 7y ago
For retirement and pension planning, less frequent, larger major market shifts make equities-based investments less, not more, suited to individual investors. Risks are arbitrarily imposed on substantial cohort-wide populations, irrespective of individuals' independent planning and preparation. The present system is a multi-generational slow-motion trainwreck.
- troydavis 7y ago
  > less frequent, larger major market shifts make equities-based investments less, not more, suited to individual investors. My comment may not have been clear. I wasn't claiming that equities (or a certain % of one's portfolio in equities) are or aren't suitable for individual investors. Rather, I was stating that a 30-35% decline during one's ownership is normal: https://www.yardeni.com/pub/sp500corrbeartables.pdf https://www.yardeni.com/pub/sp500corrbeartables.pdf page 4. Between the end of the Great Depression and now, roughly every 5-10 years you'll see a major decline. Since 1940, I count 13 peak-to-trough drops of -20% or more and 7 of -30% or more (including -36% in 1968 and -48% in 1973 - this isn't a new thing). If you want to own equities, that's what you're signing up for.
  - dredmorbius 7y ago
    Fair enough. But: individual ownership means assuming all periodic market-wide risk, as well as other burdens. A socialised net can spread those risks intergenerationally.

4 ms·

So far, the peak-to-trough and peak-to-current performance is typical of any significant past recession. That is, while the coronavirus may not have been predi

by troydavis 7y ago

dredmorbius 7y ago
For retirement and pension planning, less frequent, larger major market shifts make equities-based investments less, not more, suited to individual investors. Risks are arbitrarily imposed on substantial cohort-wide populations, irrespective of individuals' independent planning and preparation. The present system is a multi-generational slow-motion trainwreck.
- troydavis 7y ago
  > less frequent, larger major market shifts make equities-based investments less, not more, suited to individual investors. My comment may not have been clear. I wasn't claiming that equities (or a certain % of one's portfolio in equities) are or aren't suitable for individual investors. Rather, I was stating that a 30-35% decline during one's ownership is normal: https://www.yardeni.com/pub/sp500corrbeartables.pdf https://www.yardeni.com/pub/sp500corrbeartables.pdf page 4. Between the end of the Great Depression and now, roughly every 5-10 years you'll see a major decline. Since 1940, I count 13 peak-to-trough drops of -20% or more and 7 of -30% or more (including -36% in 1968 and -48% in 1973 - this isn't a new thing). If you want to own equities, that's what you're signing up for.
  - dredmorbius 7y ago
    Fair enough. But: individual ownership means assuming all periodic market-wide risk, as well as other burdens. A socialised net can spread those risks intergenerationally.