4 ms·

This has been true for the US markets till now but I am always scared to think of a scenario where they go the way of UK markets have done in the last decade. L

This has been true for the US markets till now but I am always scared to think of a scenario where they go the way of UK markets have done in the last decade. Look at one[1] of the FTSE 100's Index fund returns. They stand at 3.58% annualised, i.e your money is now 1.4x of the original amount. This is considering the fact that we are looking at returns from Aug 2010 levels when the FTSE index was already 20% down from the 2008 peak. So the peaks I see now in Nasdaq actually look very scary to me. Anyway, I think if they decide to go ahead with equity, they should spread it out over a period. [1] https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR06I23&tab=1 https://www.morningstar.co.uk/uk/funds/snapshot/snapshot.asp...

jefftk 6y ago
> They stand at 3.58% annualised, i.e your money is now 1.4x of the original amount. Do you have a typo?
- guenthert 6y ago
  CL-USER> (expt 1.0358 10) 1.4215397
- mdpye 6y ago
  Annualised so ten years of 3.58% increase, 1.0358^10 = 1.4215
  - jefftk 6y ago
    Thanks! I had missed the reference to "decade" on initial reading.
owenversteeg 6y ago
Hmm, is that with dividends reinvested? UK firms tend to pay out higher dividends for various reasons. It seems that with dividends reinvested, you would have made approximately double your money before the crash [0], which took the value down by around 19% today, so you'd end with around 1.62x today in 10 years, nearly exactly 5% annualized including the effects of Corona. That said, I would not make the UK stock market any significant part of my portfolio. It's an island of 0.06 billion people trying to go it alone in the world, under delusions of being a grand colonial power, while its economy has shrank since 2007. If I was trying to _grow_ my money I'd put it elsewhere. While I'm upset with recent US leadership as well, the US has a massive advantage in that it is the world's largest economy and enjoys the results of innovation that you won't see in the UK. [0] https://www.ig.com/en/trading-strategies/what-are-the-average-returns-of-the-ftse-100--200529 https://www.ig.com/en/trading-strategies/what-are-the-averag...
- actuator 6y ago
  It should be with dividends reinvested, in absolute index value I think FTSE 100 is still 10% down from 2008 peak. The difference in return might be because the fund hasn't tracked the index well. I gave the example of UK as UK was precisely a power in the past and lost the lead somewhere and never recovered well. I think US is sound for foreseeable future but with the rising geopolitical tension and the sort of signals coming from China, if they become stronger in the future and have the ability to influence more markets, we might see influence of US waning as well.
throw0101a 6y ago
> This has been true for the US markets till now but I am always scared to think of a scenario where they go the way of UK markets have done in the last decade. This is why one diversifies. Only investing in the stocks of the country you live in is called "home country bias": * https://www.investopedia.com/terms/h/home-country-bias.asp https://www.investopedia.com/terms/h/home-country-bias.asp Using a football ('soccer') analogy: * https://www.franklintempleton.co.uk/investor/resources/investor-education/behavioural-finance/home-country-bias https://www.franklintempleton.co.uk/investor/resources/inves... Being slightly over-weight at home isn't totally bad (it helps with currency swings), but for most folks they'd do well to go international to a certain extent. An analysis for a bunch of Anglophone countries (US, CA, UK, AU): * https://www.vanguard.com/pdf/ISGGEB.pdf https://www.vanguard.com/pdf/ISGGEB.pdf

jefftk 6y ago

> They stand at 3.58% annualised, i.e your money is now 1.4x of the original amount. Do you have a typo?

guenthert 6y ago
CL-USER> (expt 1.0358 10) 1.4215397
mdpye 6y ago
Annualised so ten years of 3.58% increase, 1.0358^10 = 1.4215
- jefftk 6y ago
  Thanks! I had missed the reference to "decade" on initial reading.

owenversteeg 6y ago

Hmm, is that with dividends reinvested? UK firms tend to pay out higher dividends for various reasons. It seems that with dividends reinvested, you would have made approximately double your money before the crash [0], which took the value down by around 19% today, so you'd end with around 1.62x today in 10 years, nearly exactly 5% annualized including the effects of Corona. That said, I would not make the UK stock market any significant part of my portfolio. It's an island of 0.06 billion people trying to go it alone in the world, under delusions of being a grand colonial power, while its economy has shrank since 2007. If I was trying to _grow_ my money I'd put it elsewhere. While I'm upset with recent US leadership as well, the US has a massive advantage in that it is the world's largest economy and enjoys the results of innovation that you won't see in the UK. [0] https://www.ig.com/en/trading-strategies/what-are-the-average-returns-of-the-ftse-100--200529 https://www.ig.com/en/trading-strategies/what-are-the-averag...

actuator 6y ago
It should be with dividends reinvested, in absolute index value I think FTSE 100 is still 10% down from 2008 peak. The difference in return might be because the fund hasn't tracked the index well. I gave the example of UK as UK was precisely a power in the past and lost the lead somewhere and never recovered well. I think US is sound for foreseeable future but with the rising geopolitical tension and the sort of signals coming from China, if they become stronger in the future and have the ability to influence more markets, we might see influence of US waning as well.

throw0101a 6y ago

> This has been true for the US markets till now but I am always scared to think of a scenario where they go the way of UK markets have done in the last decade. This is why one diversifies. Only investing in the stocks of the country you live in is called "home country bias": * https://www.investopedia.com/terms/h/home-country-bias.asp https://www.investopedia.com/terms/h/home-country-bias.asp Using a football ('soccer') analogy: * https://www.franklintempleton.co.uk/investor/resources/investor-education/behavioural-finance/home-country-bias https://www.franklintempleton.co.uk/investor/resources/inves... Being slightly over-weight at home isn't totally bad (it helps with currency swings), but for most folks they'd do well to go international to a certain extent. An analysis for a bunch of Anglophone countries (US, CA, UK, AU): * https://www.vanguard.com/pdf/ISGGEB.pdf https://www.vanguard.com/pdf/ISGGEB.pdf