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I am genuinely curious what better alternatives are on the table? Sticking retirement money into other vehicles seems guaranteed to have more tepid (if consiste
by fbdab103 4y ago
I am genuinely curious what better alternatives are on the table? Sticking retirement money into other vehicles seems guaranteed to have more tepid (if consistent) returns. For someone at the start of a 40 year career, the additional volatility seems well worth it.
- kqr 4y agoAdditional volatility is worth it until you hit a 50 % drawdown where someone who was only partially invested would have a 20 % drawdown and then rebound faster. Remember that investments compound, and it takes as long to go from 10 to 100 as it does from 100 to 1000. Avoiding drawdowns is critical for long-term growth. You want a significant fraction of your wealth in stuff with tepid and consistent returns. In fact, you want this fraction to be constant over time. That will outperform any one asset class as time goes by.
- fbdab103 4y agoConsider me still dubious. A 25 year old to 35 year old, starting from $0 with annual contributions of $12k in a 100% stock vs mixed 50% stock and others, I would bet 9 times out of 10 on the full stock. I would have to see some models to contrast, but I still suspect that given the timeline, the stock heavy portfolio is going to outperform if only because of DCA.