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Investing Returns on the S&P500

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Re: Investing Returns on the S&P500

#41

Post by mark_edward »

georgeecollins wrote: post #37
mac01021 wrote: post #17

Earlier quoted context omitted.

So what alternative method do you propose for predicting growth (or decline) over the next century?

100 years ago you would have probably mostly invested in the UK, French, German and Russian stock market as well as the US. So if you want to predict the next 100 years I would try to combine the performance of the UK and the US, on the assumption that US is going to behave economically like an existing power rather than an up and coming power. Also, just as some risky "foreign" markets did awesome a hundred years ag…

You would've bought Russian stock in 1916?

Re: Investing Returns on the S&P500

#42

Post by [deleted] »

pbreit wrote: post #34

I am not a financial advisor and this is not financial advice! Robinhood seems like an OK way to keep a free portfolio of ETFs approximating a Vanguard all-in-one fund. My super-unscientific portfolio is loosely based on Vanguard's LifeStrategy Growth & Moderate Growth funds with a sliver of MGK that seemed to both boost returns and moderate declines. A $5k portfolio would be 6 MGK (10%), 19 VTI (40%), 23 VXUS (20%),…

[deleted]

Re: Investing Returns on the S&P500

#43

Post by smpetrey »

artursapek wrote: post #35
pbreit wrote: post #34

I am not a financial advisor and this is not financial advice! Robinhood seems like an OK way to keep a free portfolio of ETFs approximating a Vanguard all-in-one fund. My super-unscientific portfolio is loosely based on Vanguard's LifeStrategy Growth & Moderate Growth funds with a sliver of MGK that seemed to both boost returns and moderate declines. A $5k portfolio would be 6 MGK (10%), 19 VTI (40%), 23 VXUS (20%),…

I really don't understand the appeal of Robinhood... if you're going to hold stocks for years you really shouldn't be skimping on an $8 commission. Get a proper broker with a reputation.

Well for one, it's about disruption and change. The creators are more than familiar with brokerage, and it shouldn't be a shocker that most brokers do not operate trades, it's mostly electronic.[1] If you're going to hold stocks for years, why not skimp on an $8 commission? If you make a purchase of 100 shares of $FB, it could save you at least $800 for that sale.

So the real question is, why not?

[1] https://www.youtube.com/watch?v=JwpQpFqzoAE

Re: Investing Returns on the S&P500

#44

Post by paulgb »

artursapek wrote: post #35
pbreit wrote: post #34

I am not a financial advisor and this is not financial advice! Robinhood seems like an OK way to keep a free portfolio of ETFs approximating a Vanguard all-in-one fund. My super-unscientific portfolio is loosely based on Vanguard's LifeStrategy Growth & Moderate Growth funds with a sliver of MGK that seemed to both boost returns and moderate declines. A $5k portfolio would be 6 MGK (10%), 19 VTI (40%), 23 VXUS (20%),…

I really don't understand the appeal of Robinhood... if you're going to hold stocks for years you really shouldn't be skimping on an $8 commission. Get a proper broker with a reputation.

I use robinhood even though I have a "proper" brokerage account. I would be happy to pay an $8 commission if I knew what I was getting for the money over what robinhood offered, but as far as I can tell I'd just be paying $8 to use a crappier UI to make my trades.

Re: Investing Returns on the S&P500

#45

Post by tanderson92 »

misframer wrote: post #39
pbreit wrote: post #34

I am not a financial advisor and this is not financial advice! Robinhood seems like an OK way to keep a free portfolio of ETFs approximating a Vanguard all-in-one fund. My super-unscientific portfolio is loosely based on Vanguard's LifeStrategy Growth & Moderate Growth funds with a sliver of MGK that seemed to both boost returns and moderate declines. A $5k portfolio would be 6 MGK (10%), 19 VTI (40%), 23 VXUS (20%),…

Those are all Vanguard funds so you can trade those with Vanguard for free. You don't need Robinhood.

Last time I looked you couldn't hold fractional shares (i.e. by reinvesting dividends) at Robinhood. Obviously, most real brokerages such as Vanguard will allow this.

Re: Investing Returns on the S&P500

#47

Post by soVeryTired »

stevenmays wrote: post #6
vanderfluge wrote: post #3

I'd be curious to see results for other countries, the graph of "Chance of Losing in the Stock Market" in particular. In the case of Japan, it appears that if you'd still have significant losses if you invested 25-30 years ago: https://finance.yahoo.com/echarts?s=%5En225+Interactive#{"ra...

If you're in Japan you can still invest in the US stock market... and should to diversify. I invest in international markets even though I am in the U.S.

Just to point out to people who may not be aware, this leaves you open to currency risk. The FTSE 100 dropped 3% in GBP terms last week, but maybe 10% in USD terms.

This cuts both ways of course: you can make money on favourable currency moves. But it's an important risk to be aware of before buying assets in a foreign currency.

Re: Investing Returns on the S&P500

#48

Post by Retric »

sks wrote: post #40
Retric wrote: post #27

Earlier quoted context omitted.

While inflation was adjusted for it was not accurately adjusted for as it ignored taxes. If your returns are 10% and inflation is 10% you get taxed on that 10% and lose money. PS: Now if this is for 401k accounts or something that's another story.

You dont get taxed until you sell. The performance shown here is for a buy and hold strategy.

Dividends are also taxed, so even reinvesting has a cost.

Granted, IRA/401k etc exist and in years with 0-3% it's not that big a deal, but over 20 years it's often a significant cost.

Re: Investing Returns on the S&P500

#49

Post by greeneggs »

sks wrote: post #40
Retric wrote: post #27

Earlier quoted context omitted.

While inflation was adjusted for it was not accurately adjusted for as it ignored taxes. If your returns are 10% and inflation is 10% you get taxed on that 10% and lose money. PS: Now if this is for 401k accounts or something that's another story.

You dont get taxed until you sell. The performance shown here is for a buy and hold strategy.

No, you do get taxed on dividends.

Re: Investing Returns on the S&P500

#50

Post by tosseraccount »

dforrestwilson wrote: post #36
maxxxxx wrote: post #22

Looking at the discussions here I find it interesting that even in something as number driven as the stock market everybody argues about the meaning and the validity of the numbers. There really is no clear picture. But somehow the regular guy is supposed to navigate his way through this jungle of conflicting, confusing or meaningless numbers. And considering the long time frames most people don't have much opportuni…

1. If you're right 51% of the time when you invest you're going to get rich. Unfortunately the odds of you being right 51% of the time are incredibly low. 2. Heed Rule #1, and put most (if not all) of your money in broad market ETFs. 3. If you DO decide to actively invest, think about your strengths both in terms of character and industry knowledge and play to those. I don't know jack about healthcare and have had my…

"this is a zero-sum game"

Minor quibble. That is not accurate.

You see teenagers buying hotdogs with a credit card. Visa and Mastercard go public, you buy shares, it goes up, up, up.

There's no zero sum here and people can spot special values without deep analysis.

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