4 ms·

You are correct, but that doesn't mean this will hold true forever.

by rocgf 4y ago

SketchySeaBeast 4y ago
Given no reliable alternatives, I don't see an option other than to bet my long term goals on long running trends.
- Jensson 4y ago
  You cherry picked the companies though. Take the index for the top companies in some other country than USA and that investment no longer looks as secure. USA did great the past 100 years, many other countries didn't.
  - throwaway5959 4y ago
    Buy VT instead. If thirty years from now the value of every meaningful company on Earth is inflation adjusted worth less than it is now, bullets and farm land would have been the only viable investment.
  - SketchySeaBeast 4y ago
    OK, so I didn't make the original S&P market argument, I think they should go bigger and focus on globally diversified broad market funds, but, to get back to my original point, what's the alternative here?
    - tmountain 4y ago
      There isn't one. People love to spread doom and gloom without any real solutions. Real estate, gold, crypto, bonds, etc... are all either affected or soon to be affected by these economic conditions. Panic sellers will lose big and folks that don't have the means to weather the storm will suffer. Personally, I still believe in a well diversified portfolio being the best option (as do many), but the truth is, nobody really knows.
  - est31 4y ago
    Usually those indexes are not as diversified as the US index is. Take German DAX for example. It's mostly made up by chemical, car and industrial companies. The post-war German economy did really great as well, but many leading German companies are private. Furthermore, the USA is one of the biggest economies in the world, way bigger than most single countries on their own.
pwinnski 4y ago
The index fund approach doesn't suggest that index funds will always do really well, it suggest that it will always do better over a long period of time than individually-selected stock. Any conditions that cause index funds to do poorly seems to also cause most individual stocks to do poorly. Index funds are a risk-mitigation strategy. Of course it is possible after the fact to find collections of individual stocks that have outperformed the index fund. Trillions of dollars have been staked on trying to do so ahead of time, with little to no success. Is it possible in the future that groups of funds will somehow perform worse than the individual stocks making up those groups? It's very hard to see how that could happen over any extended period of time.

You are correct, but that doesn't mean this will hold true forever.

by rocgf 4y ago

You are correct, but that doesn't mean this will hold true forever.

SketchySeaBeast 4y ago

Given no reliable alternatives, I don't see an option other than to bet my long term goals on long running trends.

Jensson 4y ago
You cherry picked the companies though. Take the index for the top companies in some other country than USA and that investment no longer looks as secure. USA did great the past 100 years, many other countries didn't.
- throwaway5959 4y ago
  Buy VT instead. If thirty years from now the value of every meaningful company on Earth is inflation adjusted worth less than it is now, bullets and farm land would have been the only viable investment.
- SketchySeaBeast 4y ago
  OK, so I didn't make the original S&P market argument, I think they should go bigger and focus on globally diversified broad market funds, but, to get back to my original point, what's the alternative here?
  - tmountain 4y ago
    There isn't one. People love to spread doom and gloom without any real solutions. Real estate, gold, crypto, bonds, etc... are all either affected or soon to be affected by these economic conditions. Panic sellers will lose big and folks that don't have the means to weather the storm will suffer. Personally, I still believe in a well diversified portfolio being the best option (as do many), but the truth is, nobody really knows.
- est31 4y ago
  Usually those indexes are not as diversified as the US index is. Take German DAX for example. It's mostly made up by chemical, car and industrial companies. The post-war German economy did really great as well, but many leading German companies are private. Furthermore, the USA is one of the biggest economies in the world, way bigger than most single countries on their own.

pwinnski 4y ago

The index fund approach doesn't suggest that index funds will always do really well, it suggest that it will always do better over a long period of time than individually-selected stock. Any conditions that cause index funds to do poorly seems to also cause most individual stocks to do poorly. Index funds are a risk-mitigation strategy. Of course it is possible after the fact to find collections of individual stocks that have outperformed the index fund. Trillions of dollars have been staked on trying to do so ahead of time, with little to no success. Is it possible in the future that groups of funds will somehow perform worse than the individual stocks making up those groups? It's very hard to see how that could happen over any extended period of time.