3 ms·

There might not be an alternative. However, the example is simply wrong (IMO) since it assumes that within a 30 year timeframe you'll have gained 8% on average

There might not be an alternative. However, the example is simply wrong (IMO) since it assumes that within a 30 year timeframe you'll have gained 8% on average (adjusted for inflation). If this would be true, thne yes it would be a decision-making trap. I think that's what morley is getting at. I'm arguing it's a tough sell that the S&P 500 works like that. If one would agree that the S&P 500 might not continue to give 8% ROI on average over a 30 year time frame, then one might consider doing something else with their money. For example, maybe it's more fruitful to invest in yourself to upskill even more rather than putting your money into the markets. I don't know I haven't researched it, I myself try to beat the market, it's a fun endeavour. The jury is still out.

lexapro 4y ago
There are ETFs that invest in international stocks. VT for example. That way you're not betting it all on one country.
- mettamage 4y ago
  That's a good point, betting on the world is a more viable strategy. That is at least, if the world is growing in an economic sense. With that said, since the world population will grow, I'd be willing to make that bet. In this case, I'd say the example holds up.
  - whiplash451 4y ago
    The point of investing in an ETF is not exactly to bet that the economy will grow no matter what, but to minimize variance and regret with the money you had at the beginning (i.e. you may end up in the red, but in terms of expectations, your likelihood of being in the red was no worse than the average).
    - strix_varius 4y ago
      Exactly - for me, investment is less about "making it big" and "beating the market," and more about, "storing the value of the work I did to earn this $X." Such that, if the "burn rate" for my household today is $60k/yr, and I store $60k in investments, then when I withdraw at some future date $X will still be enough to support my household for a year.
- pirate787 4y ago
  The revenue of the S & P is 50% global so pay attention that 1) US ETFs already have huge global exposure and 2) many country ETFs have global corporations in them

lexapro 4y ago

There are ETFs that invest in international stocks. VT for example. That way you're not betting it all on one country.

mettamage 4y ago
That's a good point, betting on the world is a more viable strategy. That is at least, if the world is growing in an economic sense. With that said, since the world population will grow, I'd be willing to make that bet. In this case, I'd say the example holds up.
- whiplash451 4y ago
  The point of investing in an ETF is not exactly to bet that the economy will grow no matter what, but to minimize variance and regret with the money you had at the beginning (i.e. you may end up in the red, but in terms of expectations, your likelihood of being in the red was no worse than the average).
  - strix_varius 4y ago
    Exactly - for me, investment is less about "making it big" and "beating the market," and more about, "storing the value of the work I did to earn this $X." Such that, if the "burn rate" for my household today is $60k/yr, and I store $60k in investments, then when I withdraw at some future date $X will still be enough to support my household for a year.
pirate787 4y ago
The revenue of the S & P is 50% global so pay attention that 1) US ETFs already have huge global exposure and 2) many country ETFs have global corporations in them