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Investing Returns on the S&P500

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Re: Investing Returns on the S&P500

#221

Post by loeg »

squeaky-clean wrote: post #202
loeg wrote: post #175

Earlier quoted context omitted.

I saw that visualization back in 2011 and I think it's actually a pretty poor one. It uses shades of red for what are objectively not bad outcomes (return greater than inflation is red, real return between 3 and 7% is pink). IMO that's misleading. It would be helpful if it compared against the same visualization for other straightforward market investments, like bonds, or savings accounts / CDs. Those asset classes w…

> It uses shades of red for what are objectively not bad outcomes (return greater than inflation is red, real return between 3 and 7% is pink). IMO that's misleading. Not sure if I'm reading it wrong, but the key shows <=0% as red, 0-3% as pink, 3-7% as biege.

3-7% looks more pink than beige to me, but I'm a little red-green colorblind, so what do I know.

IMO it would make more sense to show 0-3% real return — strictly above inflation — as beige and 3-7% real return as a shade of green.

Re: Investing Returns on the S&P500

#222

Post by hellofunk »

malz wrote: post #198
base698 wrote: post #160

Earlier quoted context omitted.

Can confirm. Been trading options for 3 years, lose money on 90% of my trades, but still up 30% for the year. It's basic expected value, magnify your wins and minimize your loss to what you know you can lose.

So your counterparty makes money on 90% of his trades and is down 30% for the year? He must feel like a schmuck.

That is not at all how the market works.

Re: Investing Returns on the S&P500

#223

Post by Cyph0n »

amaks wrote: post #213
xiaoma wrote: post #184

Earlier quoted context omitted.

> "anywhere in developed world" I hate this terminology. If the US has, in fact, "finished" developing, then the future of the S&P will be bleak. I don't think that's the case at all, though. I think development has just started and we'll see fantastic advances in bio-informatics, solar power, 3D printing and a number of other fields in the upcoming decades. When I was a teenager, I pirated music. I seriously hope my…

US is far from finishing deveping, fortunately or unfortunately. Take trains, for example, area where US is far behind China, Japan, or European countries, despite the size of its territory. I'm sure there are other examples.

Transportation in general is weak in the US compared to other countries.

Re: Investing Returns on the S&P500

#224

Post by SilasX »

jonknee wrote: post #149
SilasX wrote: post #123

Earlier quoted context omitted.

And then that index fund has to take the loss that comes with having bought a stock that failed and sell at a loss, while not capturing the gains of stocks that got big enough to make it on the index. Shouldn't the index "return" thus diverge from the return of an actual index fund in practice given enough years?

That's not how it works, the return of the index is the actual return of the included stocks while they are in the index . There will be winners and losers, but the return is actually what you get.

I don't see how that addresses the dynamic I described, beyond re-asserting the conclusion I was questioning.

Re: Investing Returns on the S&P500

#225

Post by nostromo »

tbrooks wrote: post #82

Warren Buffett bet $1mm that S&P500 will outperform a hedge fund over a 10 year period.[1] That's good enough for me, I'll follow the oracle. [1] http://longbets.org/362/

The delicious irony of a person that has outperformed the market betting that it's impossible to outperform the market... and (probably) winning. :-)

Re: Investing Returns on the S&P500

#226

Post by disordinary »

Redoubts wrote: post #142
JackFr wrote: post #23

Earlier quoted context omitted.

> USA is superpower at the peak. That remains to be seen > Argentina used to be richest country in the world. That is not true. In the early 20th century they were top 10, but never surpassed Britain or the US in GDP per capita.

> That remains to be seen What would a more powerful USA look like? It doesn't appear that the country is after an empire the same way the British had one 100 years ago, so raw aggression is out. I can't imagine a realistic scenario that doesn't require the implosion of other nations to embiggen America.

The USA has a huge empire, probably the largest ever seen, but it's not an empire of government expansion it's an empire built by companies and culture.

Re: Investing Returns on the S&P500

#227

Post by shimon »

the_watcher wrote: post #201
Redoubts wrote: post #142

Earlier quoted context omitted.

> That remains to be seen What would a more powerful USA look like? It doesn't appear that the country is after an empire the same way the British had one 100 years ago, so raw aggression is out. I can't imagine a realistic scenario that doesn't require the implosion of other nations to embiggen America.

> I can't imagine a realistic scenario that doesn't require the implosion of other nations to embiggen America. This has happened! In the past 30 years, no less.

To what are you referring? https://en.wikipedia.org/wiki/Territorial_evolution_of_the_U... ends in 1970.

Re: Investing Returns on the S&P500

#228

Post by dharma1 »

UK-AL wrote: post #69
soVeryTired wrote: post #47

Earlier quoted context omitted.

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.

You want this though. For example if you was English and invested all in uk investments you would have dropped massively USD terms. If you spread your investments in many different currencies in pound terms you would have actually gained from this crisis. Diversification also applies to currency

I moved my all of my UK pension to non-UK bonds (mainly US) one day before the referendum result. It was a mission and a half using my pension fund's online system, truly awful UX, I almost gave up.

I don't normally change the holdings or attempt active investing, but it just seemed like a very asymmetric bet - nearly 50/50 polls, very large potential downside if not diversifying outside the UK/sterling.

Re: Investing Returns on the S&P500

#229

Post by OscarCunningham »

soVeryTired wrote: post #47
stevenmays wrote: post #6

Earlier quoted context omitted.

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.

On the other hand you often already have exposure to the fate of your own country, because you live and work there.

Re: Investing Returns on the S&P500

#230

Post by nerfhammer »

amaks wrote: post #213
xiaoma wrote: post #184

Earlier quoted context omitted.

> "anywhere in developed world" I hate this terminology. If the US has, in fact, "finished" developing, then the future of the S&P will be bleak. I don't think that's the case at all, though. I think development has just started and we'll see fantastic advances in bio-informatics, solar power, 3D printing and a number of other fields in the upcoming decades. When I was a teenager, I pirated music. I seriously hope my…

US is far from finishing deveping, fortunately or unfortunately. Take trains, for example, area where US is far behind China, Japan, or European countries, despite the size of its territory. I'm sure there are other examples.

Tangent, but the US freight rail networks are much better than Europe. US is good at freight rail and bad at passenger service, Europe is vice versa.
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