4 ms·

Unless you’re retiring in the next 10 years, or planning on purchasing a house in the next few years, then just make your emergency fund a little bigger and hol

• fny 4y ago
  Yes it does. If you invested near the dot com peak or the japan peak, you still haven't made your money back. This notion of passive investing that has been pounded into peoples heads for years is complete bullshit and has only worked because there was always someone else ready to pay more for the same asset and because rates were perpetually held low. Some points to consider: (1) You have fewer millennials than baby boomers, as the baby boomers cash out from their vanguard accounts, who makes up for the difference? (2) If the S&P 500 contains companies built for a certain macro regime (low inflation, low interest rates), and the macro regime is shifting, you can be penalized by owning a set of assets that do not provide adequate returns (Tesla is currently the 5th largest weighting in the S&P, they don't pay you squat.) Go look at charts of the S&P 500 beyond the last 40 years when rates were more variable, you'll see the market can at times be a shit investment vehicle that might not give you a return by the time you retire and on an inflation adjusted basis has a negative return! Buy low, sell high. Save cash and be patient.
  • thematrixturtle 4y ago
    The obvious issue with the obvious plan is that you can only tell what's "high" and what's "low" in retrospect, and if you time your lump sum investment wrong (dot com peak, Japan peak etc), you end up negative for a long, long time. Whereas DCA or equivalent guarantees that you capture the ups as well as the downs.
  • PaulDavisThe1st 4y ago
    > If you invested near the dot com peak or the japan peak, you still haven't made your money back. What does this even mean? That you invested the only money you ever invested entirely in the relatively brief period of the dot com peak? Who does that? (Obviously not nobody, but ...) To all effects and purposes, nobody does that. So what it really means is "the money you invested during that one period (perhaps a year or so), and likely only the money you invested in dot com and adjacent stocks, has yet to be made back". In the meantime, the other money you invested before and after the dot com peak has done rather well, unless you specifically made some particularly disastrous choices.
    • rcpt 4y ago
      > you invested the only money you ever invested entirely in the relatively brief period That's pretty common for a mortgage
      • PaulDavisThe1st 4y ago
        The dot com crash was not associated with a particularly noticeable "underwater" period for real estate, so if you bought a house during that time, you're not likely to "still be underwater", which was the GP's claim.
  • mbesto 4y ago
    > Buy low, sell high. Save cash and be patient. Great advice. So, ummmmm, how long is patient enough? 18 months, 3 months? What's low? Is this the lowest it's going to get? If you have answers to all of this, I want to invest in your fund.
  • humanrebar 4y ago
    > You have fewer millennials than baby boomers, as the baby boomers cash out from their vanguard accounts, who makes up for the difference? The Boomers are using or investing that cash, though. Sooner or later anyway. And that cash would flow to the current owners of the things they are patronizing. It's not like they're investing in dry ice and then throwing it in the ocean.
  • eric_cc 4y ago
    >If you invested near the dot com peak If you went all-in.. had no money in before and never invested after. Sure..
  • YZF 4y ago
    If you went all in on the day the dot com peaked then you more than made your money back. You're up + dividends.
  • quickthrower2 4y ago
    Microsoft has gone up 7% a year since .com peak. SP500 has gone up 5%.