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The historic worst case for the inflation-adjusted S&P 500 is not being up from 1929 - 1987 - 58 years. https://www.macrotrends.net/2324/sp-500-historical-chart

The historic worst case for the inflation-adjusted S&P 500 is not being up from 1929 - 1987 - 58 years. https://www.macrotrends.net/2324/sp-500-historical-chart-data https://www.macrotrends.net/2324/sp-500-historical-chart-dat... Edit: This ignores dividend reinvestment as ummonk noted. https://www.officialdata.org/us/stocks/s-p-500/1900 https://www.officialdata.org/us/stocks/s-p-500/1900 suggests 1929 - 1944 was probably the longest time. We are in unprecedented times. Highest debt, lowest bond yields, crazy P/Es, historic GDP drop (worst since 1929, or since WW2 for some). We don't yet know how inflation/deflation will play out. CPI is useless. A lot "inflation" is going into real estate / land and the stock market. I don't think past wisdom applies anymore. If you put money into most products (including most index funds) on the stock market today you are in fact stock-picking / gambling. Also tech companies are partially up for a good reason. Small caps have lost a lot earnings power. https://twitter.com/NorthmanTrader/status/1283353116973432832 https://twitter.com/NorthmanTrader/status/128335311697343283... Much much more than tech stocks. E.g. tech stocks were almost the only ones doing any buybacks last quarter. Stay-at-home companies, solid/value companies, and cheap stocks is where hedgefunds seem to move to. But yes, some valuations are bonkers. EV stocks, CVNA, W, ... Personally, I've been late to the party, and needed to learn on the fly, BUT: I now own a portion of gold and royalty and streaming companies (mining exposure with less risk of badly run mining companies. They lend money to miners in return for metal. I.e. miners don't need to worry about the price of the metal.) Mind that GLD and SLV are not fully backed by gold and silver. There is significant counter-party risk (E.g. if the bank goes bankrupt you might not receive anything). They also haven't really been audited, and JP Morgan employees have been charged for price manipulation of metals. I reduced my bond exposure, and I will probably soon move into gov bonds exclusively. I don't want to gamble on MBSs, CLOs, corporate bonds being bailed out. (The Fed and ECB's policies skew the bond market. Ratings and yields are (increasingly) not great indicators of company health). There is little room for lower yields. Real yields (bond yield - inflation) will turn negative or are already. When rates eventually will be hiked, both stocks and bonds will fall. (See 2019 / December 2019) I started stock picking. Mainly value, but really random stuff I find on Youtube investment channels and Reddit (Of course I read up on them, listen to financial calls. Balance sheet. Cash flow. Exposure to potential problems.). I sleep better at night with a cheaper stock that has less downside, even if it isn't riding the current trend/bubble. Other than that I'd keep a good amount of cash for potential opportunities. In the current climate, stocks could fall any week, real estate will likely be on sale (depending on how many rich people will try scoop it up at the same time), or perhaps you can buy a share in a local business.

ummonk 6y ago
I think that worst case looks worse than it was because it is ignoring dividends.
- hydroreadsstuff 6y ago
  Good point. I found this here: https://www.officialdata.org/us/stocks/s-p-500/1900 https://www.officialdata.org/us/stocks/s-p-500/1900 1929 - 1944 seems to be the worst.
mancerayder 6y ago
I tend to agree with this and I'm also long several gold miners, and I've swing traded some of them (one was a value buy with a long-standing issue with the Greek government that I was watching the news on for years). It baffles me how this Bogleheads philosophy has taken tech people. People can't wrap their heads around the idea that gold goes up in times of trouble, or that work from home tech is likely to go up, or that oil is likely to go down, or whatever other myriad bets one can make. My approach is to maintain almost all cash and to trade a small percentage of the cash on extremely volatile stocks, preparing to hold long-term if necessary. I rarely invest in fully scammy pump and dumps (but lately pharma has paid off, for obvious reasons). I use the news cycle and try to anticipate what others are doing. You don't need to sell at the top and buy at the bottom to make money. In contrast, I'm looking at my work 401K which is managed with those mathemetically unstoppable index funds. It's down 2 percent while I'm up 30. Now what am I to do with the cash portion of my investment. I'm leaning in bond funds (because bond picking is something I have no idea about).
- marvin 6y ago
  How many years have you been doing this?
- humanlion87 6y ago
  How long do you think you can keep up the 30% returns? How many active investors/traders do you know have had 30% returns year after year? I think it is easy to lose sight of the long term possibilities when you are thinking about the short term.

ummonk 6y ago

I think that worst case looks worse than it was because it is ignoring dividends.

hydroreadsstuff 6y ago
Good point. I found this here: https://www.officialdata.org/us/stocks/s-p-500/1900 https://www.officialdata.org/us/stocks/s-p-500/1900 1929 - 1944 seems to be the worst.

mancerayder 6y ago

I tend to agree with this and I'm also long several gold miners, and I've swing traded some of them (one was a value buy with a long-standing issue with the Greek government that I was watching the news on for years). It baffles me how this Bogleheads philosophy has taken tech people. People can't wrap their heads around the idea that gold goes up in times of trouble, or that work from home tech is likely to go up, or that oil is likely to go down, or whatever other myriad bets one can make. My approach is to maintain almost all cash and to trade a small percentage of the cash on extremely volatile stocks, preparing to hold long-term if necessary. I rarely invest in fully scammy pump and dumps (but lately pharma has paid off, for obvious reasons). I use the news cycle and try to anticipate what others are doing. You don't need to sell at the top and buy at the bottom to make money. In contrast, I'm looking at my work 401K which is managed with those mathemetically unstoppable index funds. It's down 2 percent while I'm up 30. Now what am I to do with the cash portion of my investment. I'm leaning in bond funds (because bond picking is something I have no idea about).

marvin 6y ago
How many years have you been doing this?
humanlion87 6y ago
How long do you think you can keep up the 30% returns? How many active investors/traders do you know have had 30% returns year after year? I think it is easy to lose sight of the long term possibilities when you are thinking about the short term.