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IF you'd bought an S&P 500 tracker, you would have more than quadrupled your money.
by twic 2y ago
IF you'd bought an S&P 500 tracker, you would have more than quadrupled your money.
- synergy20 2y agoit took 14 years for s&p 500 to break even if you bought it in 2000
- abraxas 2y agoYeah, few people realize what it means to sit on a paper loss for 14 years. Not many have the mental fortitude to do that. But it's really hard to convince the millennials and younger who experienced nothing other than a roaring bull market throughout their investing lifetimes.
- gottorf 2y ago> few people realize what it means to sit on a paper loss for 14 years. Not many have the mental fortitude to do that. Partly why real estate is such a big part of most people's net worths (and covered by the OP): it's not marked to market frequently, so it's much easier to hold for decades at a time. If everyone had a ticker they looked at every day where the value of their house was updated real-time, there would be a lot more panic selling.
- rybosworld 2y ago> the millennials and younger who experienced nothing other than a roaring bull market throughout their investing lifetimes Poking at certain generations tends to be counter productive, but this jab is also disconnected from reality. Millennials entered adulthood in the shadow of the mortgage crisis, which by all measures was a depression event until the definition of a depression was reworked. There were only two significant crashes between 1929 and 2008. 1987 (black monday) and the tech bubble (2000). More recently, covid was a ~40% decline in the S&P (bigger than black monday), and another ~30% started at the beginning of 2022. It shouldn't be worn as a badge of honor, but millennials and younger have experienced more volatility in a much shorter amount of time than older generations.
- throw0101d 2y ago> it took 14 years for s&p 500 to break even if you bought it in 2000 Not if you had a modicum of bonds and rebalanced: * https://www.forbes.com/sites/advisor/2010/09/13/its-not-really-a-lost-decade/ https://www.forbes.com/sites/advisor/2010/09/13/its-not-real... Or if you had international stocks. This myopia of many Americans to only look at the S&P 500… words fail me. Sheesh. Try some diversification (peer-reviewed citations in description): * https://www.youtube.com/watch?v=1FXuMs6YRCY https://www.youtube.com/watch?v=1FXuMs6YRCY
- Cthulhu_ 2y agoBuying S&P 500 trackers is considered diversification though, since... 500 companies instead of one or two. "Sheesh".
- throw0101b 2y ago> Buying S&P 500 trackers is considered diversification though, since... 500 companies instead of one or two. "Sheesh". Except all your assets are in in one asset class (equities) in one country (US). Ask the folks in Japan who were around in 1989 how that can work out.
- twic 2y agoAnd how did a portfolio of randomly selected dot-coms of that vintage do in comparison?
- bryanlarsen 2y agoAnd if AMZN was one of ten you would have 20X'd. It's just an extreme example illustrating the principle. Most people don't have 99x as many losers as winners, most winners aren't AMZN, and most losers don't go all the way to zero.
- twic 2y agoIf you're buying dot-coms in 1999, you absolutely have 99x as many losers as winners.
- bryanlarsen 2y agoAnd if you pick any year other than 1999, there are a lot fewer losers. I picked 1999 because it was the worst, not because it was the best.