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Show HN: Inflation-adjusted stock charts – Total Real Returns

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Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#221

Post by yellowapple »

mechanical_bear wrote: post #163
jl2718 wrote: post #127

This period has been very special because of the 401k, which is itself part of the growth story of the corporate legal structure. I think this is coming to an end. Corporate boards and officers no longer represent the best long-term interests of the companies and shareholders they represent. It’s also a very precarious legal status as an arbitrary judicial ruling can make or break a company. Finally, and perhaps most…

I liked your explanation but you undermine your write up by discussing something you clearly have no business discussing: >> People tithe and sacrifice to their church for a promise of rewards in the afterlife. This is a fundamental misunderstanding of tithing and I’m not going to get into that at the moment, but it makes me consider if you are discussing other things in your write up that you don’t have experience w…

> This is a fundamental misunderstanding of tithing

Depends on the church, really. There are plenty that do hold a lack of tithing against you.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#222

Post by snake_doc »

MacsHeadroom wrote: post #143
mNovak wrote: post #114

At a glance this seems to show that bonds are in a historic drawdown. Can anyone ELI5 the implications of that?

As with any unprecedented economic phenomena, the full implications are unknown. For one thing, people retiring right now, who followed the best practice of shifting their portfolio towards bonds, are seeing millions wiped out from their individual retirement accounts. For a huge amount of would-be retirees, this is the difference between being able to afford retirement and being forced to remain in the workforce in…

For retirees, it depends. If they are in a target date fund, which most retirees are, the funds adjust their bond holding’s duration to minimize interest rate risk. The target date funds should have lowered the duration of the fixed income portfolio (ie from long dated to short dated) once they approach the target date.

The impact to short duration bond portfolios is not as drastic. A 2-year bond issued at .5% yield will lose maybe 5% in price when interest rate moves up to 3%. This is roughly what happened: https://fred.stlouisfed.org/series/DGS2

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#223

Post by pessimizer »

nemo44x wrote: post #175
zaroth wrote: post #171

Earlier quoted context omitted.

Inflation is a good reason why long term capital gains rates are lower than income tax rates. You can argue about the timeframe and getting the whole break after 1 year versus maybe giving larger breaks the longer you hold, but that’s the weeds.

Principal should be adjusted for inflation. If I invest $10k and the investment is worth $11k today but we’ve experienced 10% inflation in that time then my actual profit is 0 and I should pay no tax on the $1k of proceeds.

Why should investors get an inflation shield that wage-workers don't?

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#224

Post by nostrademons »

mywittyname wrote: post #164
gumby wrote: post #115

Earlier quoted context omitted.

> Everything I've seen in the news for last few months just seems to say "sorry, the last 50 years was a gravy train, it'll never work that way again, you're screwed". I first came to Palo Alto in 1984. All the houses were underwater (worth less than their mortgages). The tech boom was over and consensus was that it wasn’t coming back. Too bad you missed that! Just keep investing (dollar cost averaging). Pick your po…

People tend to not appreciate the struggles that the people before us had. We are looking at their situation with the absolute knowledge that things got better. We distort the lives of those in the past much in the same way do the people we follow on social media.

Also survivorship bias. We tend to forget the people that died penniless and alone.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#225

Post by Supermancho »

FooBarWidget wrote: post #139
smallerfish wrote: post #102

Earlier quoted context omitted.

Don't buy a house until the real estate market crashes. Then buy. I bought a fixer-upper in 2008 for 200k; sold it for 425k 5 years later. Recently it sold for 650k (we still get redfin notifications.) In the meantime I bought a house for 625k (nice house with some rough edges) and sold it 18 months ago in covid real estate madness for 950k. We certainly put money into both houses over time, but we'd never have been…

What if the house market crashes in 10 years? Live in a car for 10 years?

Buy small. Get a mobile home.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#226

Post by chordalkeyboard »

whatshisface wrote: post #220
someguydave wrote: post #194

Earlier quoted context omitted.

People are willing to pay fewer dollars for each asset class.

People can't be willing to pay fewer dollars for the third asset class, which is dollars.

tautologically the price of one dollar will always be one dollar but they can be less willing to spend those dollars on anything, and simultaneously less willing to sell assets they already own for dollars.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#227

Post by shepherdjerred »

sytelus wrote: post #216
jl2718 wrote: post #168

Earlier quoted context omitted.

Actually I'm heartened to see people defending religion on HN. Tithing to a church you truly belong to is probably a better use of your money, even purely by personal benefit, than tithing Wall Street. I hope that I've introduced some of those ideas in the text by making a negative comparison to the church. But yes; it was sloppy and possibly interpreted as disparaging of religious practice itself, so for that I apol…

You might be even more heartened to know that one of the top most and highly respected computer scientist, Donald Knuth, is ardently religious. The contrast between his works that is extraordinarily precisely well reasoned after decades of thinking and his complete submission to ancient religion where logical reasoning is not all that welcome, is absolutely a thing to behold. It makes me marvel at complexity and perh…

> ancient religion where logical reasoning is not all that welcome

If something gives you purpose and makes you happy isn't the most rational thing to do to follow that thing, even if the thing itself isn't logical?

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#228

Post by mariojv »

sizzle wrote: post #202
loxias wrote: post #132

Earlier quoted context omitted.

> now that I've amassed more cash than what an emergency fund requires, what does one do? Pick a few things you can put your money into, which you have confidence won't lose value given a long enough time horizon. For me, this is SPY (highest alpha but needs 10 years to recover). The traditional 60/40 SPY/TLT mix is great. Currency funds also good. VTI & chill is good. Right now the Euro has Dollar parity (ECB isn't…

This sounds like hard fought knowledge, where can I start to build a good foundation for understanding the financial terminology you posted? Thanks for sharing.

I like Bogleheads: https://www.bogleheads.org/wiki/Getting_started

The wiki and forums are great resources.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#229

Post by TameAntelope »

skinnymuch wrote: post #197
TameAntelope wrote: post #159

Earlier quoted context omitted.

So Vanguard (venerated investment institution for 50 years) is wrong and you (random HN commenter) are right? Sure, okay.

This is a really weak way to think or see the the world. Regardless of who is correct in this specific situation.

No, it very much is not. It's literally how all education works, for example.

Re: Show HN: Inflation-adjusted stock charts – Total Real Returns

#230

Post by armatav »

pessimizer wrote: post #223
nemo44x wrote: post #175

Earlier quoted context omitted.

Principal should be adjusted for inflation. If I invest $10k and the investment is worth $11k today but we’ve experienced 10% inflation in that time then my actual profit is 0 and I should pay no tax on the $1k of proceeds.

Why should investors get an inflation shield that wage-workers don't?

Because wage-workers can also be investors and receive capital gains on their investments.

You pay capital gains on your investments. You can make an investment even if you're not wealthy.

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