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I’m not even sure about index funds. If you put money in at the bottom of the market last March, that money has almost doubled while we are still in the middle

by mcny 5y ago

I’m not even sure about index funds. If you put money in at the bottom of the market last March, that money has almost doubled while we are still in the middle of a pandemic. I put some money into my vanguard Roth IRA and I can not pay almost double for an index fund this year than what I paid last year. Am I irrational?

autosharp 5y ago
> Am I irrational? Time will tell. But over the last 100 years you would not have come out ahead unless you are close to retirement already.
- fladrif 5y ago
  What are you referring to here? Assuming s&p500, I've calculated an average of 10% increase over any 10 year interval (of course not ending in a crash).
ornornor 5y ago
If you’re playing the long game, I would say it doesn’t really matter. It might crash soon but recover by the time you actually need it or it will keep going until you need it. Since these indices represent the whole market and it tanks, you won’t be worse off than most other investors/funds/pensions either way. That’s how I see it. But I’d you’re looking for a shirt term gain then it’s very different.
- city41 5y ago
  That's how I look at it as well. And if it tanks and never recovers, then it seems to me that would also mean society has completely collapsed and there really isn't much any individual could do about it anyway.
fladrif 5y ago
I'm unsure of what you're trying to say here. Are you implying that you're not able to buy the same # of shares of an index fund as you were last year? WRT the market doubling, there has been a lot of different reasons for it, QE increasing money supply that has been plowed into the stock market inflating values, top performers generally doing better relatively to society, and higher income individuals and families generally weathering the pandemic much better than low-income individuals and families. This is all to say that market performance is not tied to the pandemic in any particular way (in this case). Back to your other statement of not being able to purchase the same # of shares (if that was your point), it doesn't matter the # of shares you can buy per year, only the value of shares purchasable. The thread above you isn't calculating the # of shares increasing by 5% year, just the value of total shares . I care that the total value of my investments increases because that's what eventually matters when I start withdrawing, the # of shares I have could increase, but that wouldn't matter if the total value stays the same or decreases.

by mcny 5y ago

autosharp 5y ago

> Am I irrational? Time will tell. But over the last 100 years you would not have come out ahead unless you are close to retirement already.

fladrif 5y ago
What are you referring to here? Assuming s&p500, I've calculated an average of 10% increase over any 10 year interval (of course not ending in a crash).

ornornor 5y ago

If you’re playing the long game, I would say it doesn’t really matter. It might crash soon but recover by the time you actually need it or it will keep going until you need it. Since these indices represent the whole market and it tanks, you won’t be worse off than most other investors/funds/pensions either way. That’s how I see it. But I’d you’re looking for a shirt term gain then it’s very different.

city41 5y ago
That's how I look at it as well. And if it tanks and never recovers, then it seems to me that would also mean society has completely collapsed and there really isn't much any individual could do about it anyway.

fladrif 5y ago

I'm unsure of what you're trying to say here. Are you implying that you're not able to buy the same # of shares of an index fund as you were last year? WRT the market doubling, there has been a lot of different reasons for it, QE increasing money supply that has been plowed into the stock market inflating values, top performers generally doing better relatively to society, and higher income individuals and families generally weathering the pandemic much better than low-income individuals and families. This is all to say that market performance is not tied to the pandemic in any particular way (in this case). Back to your other statement of not being able to purchase the same # of shares (if that was your point), it doesn't matter the # of shares you can buy per year, only the value of shares purchasable. The thread above you isn't calculating the # of shares increasing by 5% year, just the value of total shares . I care that the total value of my investments increases because that's what eventually matters when I start withdrawing, the # of shares I have could increase, but that wouldn't matter if the total value stays the same or decreases.