5 ms·

It's hard to find a calculator/data source that takes dividends into account, but it looks like if you bought an S&P500 index fund in May 2022 you'd be up aroun

It's hard to find a calculator/data source that takes dividends into account, but it looks like if you bought an S&P500 index fund in May 2022 you'd be up around 18% depending on which day you purchased. So not very dramatic IMO

danuker 3y ago
Looks like VFINX returned 8.8% since 2022-05-01. How did you get to 18%? https://totalrealreturns.com/n/VFINX,VBMFX,USDOLLAR?start=2022-05-01 https://totalrealreturns.com/n/VFINX,VBMFX,USDOLLAR?start=20...
- Rebelgecko 3y ago
  I cherrypicked a day in May 2022 from here that gave something like 14% growth (https://finance.yahoo.com/quote/%5EGSPC?p=%5EGSPC https://finance.yahoo.com/quote/%5EGSPC?p=%5EGSPC), and IIRC the dividends is like 2% annually Edit: tweaking your link to May 11 gets it up to 14.8%, and I'm not sure if it's just using the opening price or the lowest of the day
  - hn1986 3y ago
    why would you cherry pick a diff day when it should be May 1st?
    - danuker 3y ago
      maybe it was "steel manning": pick a particularly hard-to-beat baseline
dralley 3y ago
May 2022 was peak "we're headed for a recession" dooming
deleted 3y ago
[deleted]
paxys 3y ago
And if you bought it a few days later (on June 13, 2022) you would be up 20.5% today even without dividend reinvestment. Trying to derive meaning from stock returns over such short periods is meaningless due to the inherent volatility of the market.
its-summertime 3y ago
A buying strategy that can compete with index funds is pretty interesting, isn't it?
- wendyshu 3y ago
  No
- dmurray 3y ago
  Only if it has uncorrelated returns and/or lower volatility than the index strategy. Buying stocks at random has the same average return as buying the index, but has higher volatility and highly correlated returns. Buying at random doesn't "compete" with index funds.
- Rebelgecko 3y ago
  Not necessarily. If my strategy is "pick 500 big companies, and buy shares weighted based on market cap" and it ends up mirroring the S&P500, I haven't done anything interesting.
despideme 3y ago
The point is not if the politicians did better than they would have with another investing approach. It's a standard conflict of interest: the appearance of insider trading is corrosive because others see it and figure it's "how the game is played." So they need to do the same to keep up.
- mewpmewp2 3y ago
  Are you saying they shouldn't be allowed to buy stock at all? Because you could cherry-pick any period of time to highlight that they have outperformed the market.
  - kelseyfrog 3y ago
    You could, but I'm positive that statisticians much smarter than me have devised a test tunable to any sensitivity one desires. The real question is, "What's our threshold of sensitivity, and what are the FPR and FNRs are we willing to endure?"
  - BobaFloutist 3y ago
    Yeah probably not individually. They could put investment money in like an independent index fund maybe...? Although honestly there should probably be a "Congressional Investment Fund" that they have to put any stock investment money into that invests equally across all publicly traded companies or something.
  - CydeWeys 3y ago
    That would be a very reasonable restriction. Anyone who works on Wall Street can only own broad index mutual funds.
    - seanhunter 3y ago
      It may have changed recently but that's not quite how the restrictions worked on Wall St in my experience (8yrs in the front office at Goldman). There are lots of restrictions to the point where owning broad funds often becomes simpler, but you can do single-stock trades etc if you want to. See another comment where I explain more but how it used to work for me was you have to trade through the employee trading desk (and aren't allowed to have unmonitored brokerage accounts) then any trade gets vetted against various lists (some but not all of which are available to you ahead of time to protect deal confidentiality) and then there are static criteria about how long you have to hold particular positions etc.
signatureMove 3y ago
2% advantage is huge.
- Rebelgecko 3y ago
  2% is huge if it's consistent and replicable thru both good and bad market conditions. Idk if you can say that's the case based off of this data. If you tried a dozen different strategies, I bet a few of them could outperform the market for at least 18 months.
deleted 3y ago
[deleted]

danuker 3y ago

Looks like VFINX returned 8.8% since 2022-05-01. How did you get to 18%? https://totalrealreturns.com/n/VFINX,VBMFX,USDOLLAR?start=2022-05-01 https://totalrealreturns.com/n/VFINX,VBMFX,USDOLLAR?start=20...

Rebelgecko 3y ago
I cherrypicked a day in May 2022 from here that gave something like 14% growth (https://finance.yahoo.com/quote/%5EGSPC?p=%5EGSPC https://finance.yahoo.com/quote/%5EGSPC?p=%5EGSPC), and IIRC the dividends is like 2% annually Edit: tweaking your link to May 11 gets it up to 14.8%, and I'm not sure if it's just using the opening price or the lowest of the day
- hn1986 3y ago
  why would you cherry pick a diff day when it should be May 1st?
  - danuker 3y ago
    maybe it was "steel manning": pick a particularly hard-to-beat baseline

dralley 3y ago

May 2022 was peak "we're headed for a recession" dooming

deleted 3y ago

[deleted]

paxys 3y ago

And if you bought it a few days later (on June 13, 2022) you would be up 20.5% today even without dividend reinvestment. Trying to derive meaning from stock returns over such short periods is meaningless due to the inherent volatility of the market.

its-summertime 3y ago

A buying strategy that can compete with index funds is pretty interesting, isn't it?

wendyshu 3y ago
No
dmurray 3y ago
Only if it has uncorrelated returns and/or lower volatility than the index strategy. Buying stocks at random has the same average return as buying the index, but has higher volatility and highly correlated returns. Buying at random doesn't "compete" with index funds.
Rebelgecko 3y ago
Not necessarily. If my strategy is "pick 500 big companies, and buy shares weighted based on market cap" and it ends up mirroring the S&P500, I haven't done anything interesting.

despideme 3y ago

The point is not if the politicians did better than they would have with another investing approach. It's a standard conflict of interest: the appearance of insider trading is corrosive because others see it and figure it's "how the game is played." So they need to do the same to keep up.

mewpmewp2 3y ago
Are you saying they shouldn't be allowed to buy stock at all? Because you could cherry-pick any period of time to highlight that they have outperformed the market.
- kelseyfrog 3y ago
  You could, but I'm positive that statisticians much smarter than me have devised a test tunable to any sensitivity one desires. The real question is, "What's our threshold of sensitivity, and what are the FPR and FNRs are we willing to endure?"
- BobaFloutist 3y ago
  Yeah probably not individually. They could put investment money in like an independent index fund maybe...? Although honestly there should probably be a "Congressional Investment Fund" that they have to put any stock investment money into that invests equally across all publicly traded companies or something.
- CydeWeys 3y ago
  That would be a very reasonable restriction. Anyone who works on Wall Street can only own broad index mutual funds.
  - seanhunter 3y ago
    It may have changed recently but that's not quite how the restrictions worked on Wall St in my experience (8yrs in the front office at Goldman). There are lots of restrictions to the point where owning broad funds often becomes simpler, but you can do single-stock trades etc if you want to. See another comment where I explain more but how it used to work for me was you have to trade through the employee trading desk (and aren't allowed to have unmonitored brokerage accounts) then any trade gets vetted against various lists (some but not all of which are available to you ahead of time to protect deal confidentiality) and then there are static criteria about how long you have to hold particular positions etc.

signatureMove 3y ago

2% advantage is huge.

Rebelgecko 3y ago
2% is huge if it's consistent and replicable thru both good and bad market conditions. Idk if you can say that's the case based off of this data. If you tried a dozen different strategies, I bet a few of them could outperform the market for at least 18 months.

deleted 3y ago

[deleted]