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>That's clearly an absurdity and not physically possible. And yet the market has averaged a 7% annual return since 1870.

_trampeltier 6y ago
But special this year the USD lost a lot of value. USD - CHF (Switzerland) is about minus 8.5%, so your +7% would be still a minus business for me. The high stock market and the high prices for building are more the true inflation than a true plus on the market.
- rajamaka 6y ago
  USD so low that it's still higher than 50% of the years this decade.
itsoktocry 6y ago
Nominal returns. Unfortunately, none of us are average. You can gain 100% many times, but lose it only once. It's going to be fun when the "just buy an index and you'll be fine" strategy falters (in this case a cap-weighted, large US company index that buys shares at any price). The S&P500 isn't diverse like they talk about in finance textbooks. There are quite a few years in that article you linked where hedge funds beat the index (2001-2005, 2007, 2009, 2010). It's almost as if who beats whom is random...
- marcusverus 6y ago
  >Nominal returns. Unfortunately, none of us are average. With index funds and ETFs everywhere, it is quite common to be average. It's also far easier to buy an all-market index fund/ETF than to pick stocks or active funds. > You can gain 100% many times, but lose it only once. True of all investments. >It's going to be fun when the "just buy an index and you'll be fine" strategy falters (in this case a cap-weighted, large US company index that buys shares at any price). The S&P500 isn't diverse like they talk about in finance textbooks. There are quite a few years in that article you linked where hedge funds beat the index (2001-2005, 2007, 2009, 2010). It's almost as if who beats whom is random... Not over the long run. From the same article, "After 10 years, 85 percent of large cap funds underperformed the S&P 500, and after 15 years, nearly 92 percent are trailing the index."

_trampeltier 6y ago

But special this year the USD lost a lot of value. USD - CHF (Switzerland) is about minus 8.5%, so your +7% would be still a minus business for me. The high stock market and the high prices for building are more the true inflation than a true plus on the market.

rajamaka 6y ago
USD so low that it's still higher than 50% of the years this decade.

itsoktocry 6y ago

Nominal returns. Unfortunately, none of us are average. You can gain 100% many times, but lose it only once. It's going to be fun when the "just buy an index and you'll be fine" strategy falters (in this case a cap-weighted, large US company index that buys shares at any price). The S&P500 isn't diverse like they talk about in finance textbooks. There are quite a few years in that article you linked where hedge funds beat the index (2001-2005, 2007, 2009, 2010). It's almost as if who beats whom is random...

marcusverus 6y ago
>Nominal returns. Unfortunately, none of us are average. With index funds and ETFs everywhere, it is quite common to be average. It's also far easier to buy an all-market index fund/ETF than to pick stocks or active funds. > You can gain 100% many times, but lose it only once. True of all investments. >It's going to be fun when the "just buy an index and you'll be fine" strategy falters (in this case a cap-weighted, large US company index that buys shares at any price). The S&P500 isn't diverse like they talk about in finance textbooks. There are quite a few years in that article you linked where hedge funds beat the index (2001-2005, 2007, 2009, 2010). It's almost as if who beats whom is random... Not over the long run. From the same article, "After 10 years, 85 percent of large cap funds underperformed the S&P 500, and after 15 years, nearly 92 percent are trailing the index."