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It’s different every time, isn’t it? World War II was different, the oil crisis in the 70s was different, debt in the 80s, doctom bubble in the 90s, the financi
by baxtr 6y ago
It’s different every time, isn’t it? World War II was different, the oil crisis in the 70s was different, debt in the 80s, doctom bubble in the 90s, the financial crisis was really different, and now this pandemic and the sheer volumes of money. It’s different every time, but economic growth has been a constant and tied to this are ultimately the prices of securities. That’s not gonna be different. So it’s a very sane choice to invest in a broad ETF eg based on the S&P.
- CuriouslyC 6y agoIndex funds are a good, safe set and forget option. In boring times, the performance is not much worse and even sometimes better. In times of upheaval though, the high volatility makes active trading MUCH more profitable.
- baxtr 6y agoAbsolutely. At the same time it’s also much riskier.
- alisonkisk 6y agoEquities are a good investment because that's where government bailout money goes. Until one day it stops or until enough rich/richish people try to sell equities for consumption it real assets (like building a house) and then the bottom falls out.
- jfengel 6y agoAt least, they always have been. With many people pouring money into them solely because they're "safe", it's possible that they have managed to turn a safe investment into a risky one,a la mortgages in the 2000s. Currently the S&P 500 has a P/E of 40, a number it historically hits before crashes. Of course the pandemic makes that figure less meaningful long term than it already is, but even before the pandemic it was well above a justified level. I have no better advice for people. I have theories on why it's overpriced, but I am also invested in broad indexes for lack of a better idea. But it may just be that the long-standing advice has become dated.
- jfk13 6y ago> high volatility makes active trading MUCH more profitable Or much more loss-making, depending how lucky you are.
- chewz 6y agoIndex funds are safe bet only with economy growing. This is ending now as we are entering japanization of the economy.