4 ms·

> The point is that, despite massive economic growth (GDP quintupled) and very high rates of inflation (in the 1970's) during that 17-year period, at the end of

> The point is that, despite massive economic growth (GDP quintupled) and very high rates of inflation (in the 1970's) during that 17-year period, at the end of those 17 years the market was valuing the index of blue-chip companies at the same market capitalization they had at the beginning of the 17 years. Makes you think that perhaps the stock market is not a great reflection of any on-the-ground reality, and that then makes you wonder what it is a reflection of, and... well, best not to think about it. Let's destroy pensions and put all of our savings into this casino run by the wealthy.

satvikpendem 4y ago
> Let's destroy pensions and put all of our savings into this casino run by the wealthy. I'd rather take the gains from all companies in the US (or merely even be allowed to invest in whatever I want) than to utilize a pension from a specific company I worked for, for 40 years. Pensions are not even guaranteed to be paid out, there have been many examples in the past 30 years about this case, if the company goes bankrupt, doesn't have enough money, etc. More often, I notice the people who advocate for pensions over 401ks or stocks know nothing about what the stock market is really like. Yes, if you put it all on GME or AMC, you'll lose your money, but as OP shows, you will make considerable wealth if you put it into VTI or another total stock market fund.
- coldpie 4y ago
  > I'd rather take the gains from all companies in the US As the post I was replying to said: > The point is that, despite massive economic growth (GDP quintupled) and very high rates of inflation (in the 1970's) during that 17-year period, at the end of those 17 years the market was valuing what at the time was the most prominent index of blue-chip companies at the same market capitalization they had at the beginning of the 17 years. That's the point, the stock market is not related to the economy. You're not getting the gains. You're getting whatever scraps the bored rich people playing poker with each other accidentally drop off the table.
  - satvikpendem 4y ago
    That's only a 17 year span. If you're funding retirement you should look at longer timescales. Also, DJIA is not the total market, and as someone else pointed out, S&P 500 "shows a nominal 6.34% return with dividends reinvested from Dec 1964 to Dec 1981." > That's the point, the stock market is not related to the economy. You're not getting the gains. You're getting whatever scraps the bored rich people playing poker with each other accidentally drop off the table. I am, though. I am getting the gains. Over the past X years, my and my family's gains from investing in the total stock market in the last 50 years (not even outliers like Google or Amazon or GameStop) have been enormous, on average 7% real as TFA shows. Maybe you're not, if you're not investing, but the stock market has consistently given us gains. Again, most people who mention the kind of "rich boys club" reasoning have been in my experience people who don't, won't, or can't invest in the stock market.
    - coldpie 4y ago
      I'm glad you got lucky at the casino. You know all those articles about how market downturns can affect your retirement plans[1] or your compensation affecting your shorter-term plans[2]? It's funny how the people with the biggest impact on the market somehow never have their retirement plans or lifestyle impacted by market downturns. They don't even have to sell their yachts. The house always wins. [1] There's a bazillion, here's one. https://finance.yahoo.com/news/worried-retiring-during-market-crash-202537378.html https://finance.yahoo.com/news/worried-retiring-during-marke... [2] https://www.parkworth.com/blogs/how-worried-should-you-be-about-your-rsus https://www.parkworth.com/blogs/how-worried-should-you-be-ab...
      - satvikpendem 4y ago
        You're still not getting it. I explicitly said we invested in the total stock market, not specific stocks. That's not a casino, much as you think it to be. There are also ways to ameliorate market downturns for retirement, it's not an unsolved problem. See guides over at /r/personalfinance or /r/financialindependence if you want examples of how. Again, if you're not investing, that's your problem, but don't blame it on the stock market itself. Thinking it's just another casino where you have to get "lucky" will cost you a lot of money in the future. Edit: I just took a look at your links, they literally contradict the retirement doom and gloom you're referring to. From [1]: > Historically Speaking, You Shouldn't Panic When the Market Crashes > Nevertheless, history says that most well-diversified portfolios can and do recover over time. > What Retirement Savers Can Do > Even though the situation may seem dire given the long time horizon to recovery, there are multiple ways to guard against asset depletion. For example, investors can avoid selling off assets in a down market by holding one to two years' worth of planned withdrawals in cash. Worldwide, high-net-worth individuals often keep 21-28% of their assets in cash or cash equivalents, with the percentage leaning towards the higher end of the range during times of market crisis. This also opens an opportunity for better buys when the market eventually improves. > Being flexible with withdrawal rates is also key to mitigating sequence risk. Morningstar analysts recommend: withdrawing a fixed percentage of your portfolio's value every year, not adjusting your withdrawal rate for inflation (i.e. not increasing your withdrawal percentage when inflation is high) or using a so-called guardrail approach where you reduce your withdrawal rate if it surpasses a set threshold.
lotsofpulp 4y ago
> Let's destroy pensions and put all of our savings into this casino run by the wealthy. The pensions are the reason why the US federal government will always bail out the stock market at large. All the investments the defined benefit pensions make are in those stocks (or correlated with them).
woobar 4y ago
Do you think pensions are kept in some other types of investments? Here are holdings of California Public Employees Retirement System: https://stockzoa.com/fund/calpers/ https://stockzoa.com/fund/calpers/
acchow 4y ago
Reflection of deregulation and reduced competition.

satvikpendem 4y ago

> Let's destroy pensions and put all of our savings into this casino run by the wealthy. I'd rather take the gains from all companies in the US (or merely even be allowed to invest in whatever I want) than to utilize a pension from a specific company I worked for, for 40 years. Pensions are not even guaranteed to be paid out, there have been many examples in the past 30 years about this case, if the company goes bankrupt, doesn't have enough money, etc. More often, I notice the people who advocate for pensions over 401ks or stocks know nothing about what the stock market is really like. Yes, if you put it all on GME or AMC, you'll lose your money, but as OP shows, you will make considerable wealth if you put it into VTI or another total stock market fund.

coldpie 4y ago
> I'd rather take the gains from all companies in the US As the post I was replying to said: > The point is that, despite massive economic growth (GDP quintupled) and very high rates of inflation (in the 1970's) during that 17-year period, at the end of those 17 years the market was valuing what at the time was the most prominent index of blue-chip companies at the same market capitalization they had at the beginning of the 17 years. That's the point, the stock market is not related to the economy. You're not getting the gains. You're getting whatever scraps the bored rich people playing poker with each other accidentally drop off the table.
- satvikpendem 4y ago
  That's only a 17 year span. If you're funding retirement you should look at longer timescales. Also, DJIA is not the total market, and as someone else pointed out, S&P 500 "shows a nominal 6.34% return with dividends reinvested from Dec 1964 to Dec 1981." > That's the point, the stock market is not related to the economy. You're not getting the gains. You're getting whatever scraps the bored rich people playing poker with each other accidentally drop off the table. I am, though. I am getting the gains. Over the past X years, my and my family's gains from investing in the total stock market in the last 50 years (not even outliers like Google or Amazon or GameStop) have been enormous, on average 7% real as TFA shows. Maybe you're not, if you're not investing, but the stock market has consistently given us gains. Again, most people who mention the kind of "rich boys club" reasoning have been in my experience people who don't, won't, or can't invest in the stock market.
  - coldpie 4y ago
    I'm glad you got lucky at the casino. You know all those articles about how market downturns can affect your retirement plans[1] or your compensation affecting your shorter-term plans[2]? It's funny how the people with the biggest impact on the market somehow never have their retirement plans or lifestyle impacted by market downturns. They don't even have to sell their yachts. The house always wins. [1] There's a bazillion, here's one. https://finance.yahoo.com/news/worried-retiring-during-market-crash-202537378.html https://finance.yahoo.com/news/worried-retiring-during-marke... [2] https://www.parkworth.com/blogs/how-worried-should-you-be-about-your-rsus https://www.parkworth.com/blogs/how-worried-should-you-be-ab...
    - satvikpendem 4y ago
      You're still not getting it. I explicitly said we invested in the total stock market, not specific stocks. That's not a casino, much as you think it to be. There are also ways to ameliorate market downturns for retirement, it's not an unsolved problem. See guides over at /r/personalfinance or /r/financialindependence if you want examples of how. Again, if you're not investing, that's your problem, but don't blame it on the stock market itself. Thinking it's just another casino where you have to get "lucky" will cost you a lot of money in the future. Edit: I just took a look at your links, they literally contradict the retirement doom and gloom you're referring to. From [1]: > Historically Speaking, You Shouldn't Panic When the Market Crashes > Nevertheless, history says that most well-diversified portfolios can and do recover over time. > What Retirement Savers Can Do > Even though the situation may seem dire given the long time horizon to recovery, there are multiple ways to guard against asset depletion. For example, investors can avoid selling off assets in a down market by holding one to two years' worth of planned withdrawals in cash. Worldwide, high-net-worth individuals often keep 21-28% of their assets in cash or cash equivalents, with the percentage leaning towards the higher end of the range during times of market crisis. This also opens an opportunity for better buys when the market eventually improves. > Being flexible with withdrawal rates is also key to mitigating sequence risk. Morningstar analysts recommend: withdrawing a fixed percentage of your portfolio's value every year, not adjusting your withdrawal rate for inflation (i.e. not increasing your withdrawal percentage when inflation is high) or using a so-called guardrail approach where you reduce your withdrawal rate if it surpasses a set threshold.

lotsofpulp 4y ago

> Let's destroy pensions and put all of our savings into this casino run by the wealthy. The pensions are the reason why the US federal government will always bail out the stock market at large. All the investments the defined benefit pensions make are in those stocks (or correlated with them).

woobar 4y ago

Do you think pensions are kept in some other types of investments? Here are holdings of California Public Employees Retirement System: https://stockzoa.com/fund/calpers/ https://stockzoa.com/fund/calpers/

acchow 4y ago

Reflection of deregulation and reduced competition.