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in aggregate stocks will go up by a modest amount on decade long scales. There is some truth here, but it isn't entirely true. People who get in the market at

in aggregate stocks will go up by a modest amount on decade long scales. There is some truth here, but it isn't entirely true. People who get in the market at their peaks, often see multi decade long negative returns (adjusted for inflation). If you bought the market in 1928, you were negative until the mid-50s. If you bought in the late 60's you were negative until the mid-90s. If you bought in the late 90's, you were negative until the mid 20-teens.

whatshisface 4y ago
That doesn't represent the situation most investors are in: large lumps of cash don't come people's way very often, most of us are paid on a monthly basis.
- Cupertino95014 4y ago
  True, and regular investing does pay off. Others have pointed that out. However, these evergreen articles (i.e. just dust off the one from the last market crash) are suggesting that you should particularly invest in tech right now, not that you should regularly invest in it. Possibly even with money that was going to be on the sidelines otherwise.
bgirard 4y ago
Here's a relevant example that timing isn't that important in the long term: https://www.cnbc.com/2015/08/27/the-inspiring-story-of-the-worst-market-timer-ever.html https://www.cnbc.com/2015/08/27/the-inspiring-story-of-the-w...
- medvezhenok 4y ago
  Timing is quite important in the longterm. This article is saying that you can still make a profit despite bad timing (assuming the stock market does well), not that timing is not important. It also only analyzes a single time period (1970s - 2015), which happens to be quite a good one for stocks, and then makes an implication about markets in general which is quite speculative.
  - 988747 4y ago
    Yes, but the point is: even with the worst possible timing you still get ahead of inflation ($1.1M from $184k invested). With regular investments you could double the profits. Also, 1970-2015 period includes three big crises, with crashes of around 50% (1972, 2000, 2007), and a bit milder crash of 1987 (34%), calling it "quite a good one for stocks" is kind of a stretch.
    - medvezhenok 4y ago
      The U.K. stock market peaked [inflation adjusted] in 1899 and never hit that mark in real terms again: https://fredblog.stlouisfed.org/2019/12/how-has-the-u-k-stock-market-fared-lo-these-past-300-years/ https://fredblog.stlouisfed.org/2019/12/how-has-the-u-k-stoc... Notably ~1917 is when global power shifted from the U.K. to the U.S., cemented in 1945. (not sure if they included dividends - would probably change the calculations, but for sure you see that 1815-1900 was a ~85 year general bull market in U.K. stocks, followed by ~75 years of real-term declines from 1900-1975). ----- Also, the U.K. stock market went nowhere from 1874 to 1952 in pound terms, a whopping ~70 years!
bryanlarsen 4y ago
Investers in the 1914 German stock exchange were negative for 100 years.
- leereeves 4y ago
  But was there a better alternative? Sometimes the current is so strong that no lifeboat can stay above water.
  - Cupertino95014 4y ago
    They could have invested outside of Germany, but maybe that wasn't legal. Of course, lots of money found its way to Switzerland anyway over the decades, and those bankers were very close-mouthed.
bmitc 4y ago
Someone investing over three decades doesn’t invest on a single day or year at the beginning of that time period. Most people put money in stocks via ETFs inside 401k, IRA, and brokerage accounts periodically (usually monthly) over decades.
ywain 4y ago
The Portfolio Charts[0] site has heat maps showing how long it takes for a given portfolio to have a positive ROI. The charts only go as far back as 1970, but they're interesting nonetheless. Indeed, for the Total Stock Market portfolio[1], if you had invested a lump sum in 2000 you would have needed to wait until 2014 to see a positive ROI. A more conservative 60% stock / 40% bonds portfolio[2] would have recovered (though not by much) by 2010. That said, as another commented pointed out, this is not very reflective of the reality of most retail investors: most people will invest over long periods of time rather than all at once. [0] https://portfoliocharts.com/ https://portfoliocharts.com/ [1] https://portfoliocharts.com/portfolio/total-stock-market/ https://portfoliocharts.com/portfolio/total-stock-market/ [2] https://portfoliocharts.com/portfolio/classic-60-40/ https://portfoliocharts.com/portfolio/classic-60-40/

whatshisface 4y ago

That doesn't represent the situation most investors are in: large lumps of cash don't come people's way very often, most of us are paid on a monthly basis.

Cupertino95014 4y ago
True, and regular investing does pay off. Others have pointed that out. However, these evergreen articles (i.e. just dust off the one from the last market crash) are suggesting that you should particularly invest in tech right now, not that you should regularly invest in it. Possibly even with money that was going to be on the sidelines otherwise.

bgirard 4y ago

Here's a relevant example that timing isn't that important in the long term: https://www.cnbc.com/2015/08/27/the-inspiring-story-of-the-worst-market-timer-ever.html https://www.cnbc.com/2015/08/27/the-inspiring-story-of-the-w...

medvezhenok 4y ago
Timing is quite important in the longterm. This article is saying that you can still make a profit despite bad timing (assuming the stock market does well), not that timing is not important. It also only analyzes a single time period (1970s - 2015), which happens to be quite a good one for stocks, and then makes an implication about markets in general which is quite speculative.
- 988747 4y ago
  Yes, but the point is: even with the worst possible timing you still get ahead of inflation ($1.1M from $184k invested). With regular investments you could double the profits. Also, 1970-2015 period includes three big crises, with crashes of around 50% (1972, 2000, 2007), and a bit milder crash of 1987 (34%), calling it "quite a good one for stocks" is kind of a stretch.
  - medvezhenok 4y ago
    The U.K. stock market peaked [inflation adjusted] in 1899 and never hit that mark in real terms again: https://fredblog.stlouisfed.org/2019/12/how-has-the-u-k-stock-market-fared-lo-these-past-300-years/ https://fredblog.stlouisfed.org/2019/12/how-has-the-u-k-stoc... Notably ~1917 is when global power shifted from the U.K. to the U.S., cemented in 1945. (not sure if they included dividends - would probably change the calculations, but for sure you see that 1815-1900 was a ~85 year general bull market in U.K. stocks, followed by ~75 years of real-term declines from 1900-1975). ----- Also, the U.K. stock market went nowhere from 1874 to 1952 in pound terms, a whopping ~70 years!

bryanlarsen 4y ago

Investers in the 1914 German stock exchange were negative for 100 years.

leereeves 4y ago
But was there a better alternative? Sometimes the current is so strong that no lifeboat can stay above water.
- Cupertino95014 4y ago
  They could have invested outside of Germany, but maybe that wasn't legal. Of course, lots of money found its way to Switzerland anyway over the decades, and those bankers were very close-mouthed.

bmitc 4y ago

Someone investing over three decades doesn’t invest on a single day or year at the beginning of that time period. Most people put money in stocks via ETFs inside 401k, IRA, and brokerage accounts periodically (usually monthly) over decades.

ywain 4y ago

The Portfolio Charts[0] site has heat maps showing how long it takes for a given portfolio to have a positive ROI. The charts only go as far back as 1970, but they're interesting nonetheless. Indeed, for the Total Stock Market portfolio[1], if you had invested a lump sum in 2000 you would have needed to wait until 2014 to see a positive ROI. A more conservative 60% stock / 40% bonds portfolio[2] would have recovered (though not by much) by 2010. That said, as another commented pointed out, this is not very reflective of the reality of most retail investors: most people will invest over long periods of time rather than all at once. [0] https://portfoliocharts.com/ https://portfoliocharts.com/ [1] https://portfoliocharts.com/portfolio/total-stock-market/ https://portfoliocharts.com/portfolio/total-stock-market/ [2] https://portfoliocharts.com/portfolio/classic-60-40/ https://portfoliocharts.com/portfolio/classic-60-40/