91–100 of 139 posts
https://www.crsp.org/wp-content/uploads/CRSP_Investments_Ill...
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>Note that almost every exchange outside the US has been flat or negative for decades. As someone who works in finance this struck me as a remarkable claim. Upon inspection it turns out to be spectacularly incorrect. After adjusting for inflation it's actually the opposite, the vast majority of countries have seen their own version of the S&P 500 grow over a 30 year period, after adjusting for inflation, not stagnati…
African, Asian, and Latam exchanges included, many of which go defunct. Japan’s has been basically flat among developed countries
Worth noting that a stock exchange becoming defunct is not the same as the value of the index associated with the stocks listed on that exchange going to zero.
For example numerous US stock exchanges also go defunct. Nevertheless the value of the stocks that traded on those exchanges remains unaffected. It's not like if NASDAQ went out of business tomorrow that Google and Microsoft would all declare bankruptcy.
Perfect time to revisit the Futurama episode where Fry realizes he's rich. https://www.youtube.com/watch?v=6JwkaLt9pf8
When I was born in 1990 my grandparents spent like 5k on government bonds that my dad didn't tell me about until I was 30. It was a very nice treat, but when I did the math to see how much more it would have been if just invested in the market I gasped.
If they bought 30-year bonds, yielding 8%-9% per year, you may have received only the 5k in the end but what happened with the 13k in coupons?
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I believe the first broadly diversified ETF didn't come about until a few years later, so realistically there wasn't an easy way for a retail investor to invest 5k in "the market" back then. (EDIT: Not true, see below.)
That's very fair. Index funds are conventional wisdom now, but I do suspect there was a long time where they were undervalued because fees were high. Now, everyone is encouraged to invest in them and do think the conventional wisdom in 30 years could possibly swing back to real estate or something like "index funds of tech"
According to https://corporate.vanguard.com/content/corporatesite/us/en/c... they were 0.35% in 1990. Higher than now, but hardly "high".
Of course there are other fees involved and everything was more complex and more expensive.
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I stand corrected! I was just thinking about SPY and its ilk.
Well, your "5k" figure is still probably accurate. They had much larger minimums at launch.
It's a nice graph, I think the most well known one is in "Stocks for the long run" [0] I'm more concerned how it will grow over the next n (lets say 50) years. Somehow, it doesn't really fit into my head that there will be another 7 doublings of money invested stock market over the coming 50 years (as others have commented, 10% annually is doubling every 7 years). Reality is complex of course, there's inflation, ther…
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On the timescale of 30 years for gov bonds vs diversified US stocks, this is almost meaningless statement. The longer a risky asset is held, the less chance of loss you’ll have. Short-horizon returns are extremely volatile, but that volatility "mean-reverts" over time. This is especially true for stocks vs bonds. Because the cash flows of bonds are fixed, prolonged inflation or rate spikes can deliver a loss that sta…
Bonds are considered safer because short of the US losing WWIII there is practically no way the US bonds would not pay out or lose value. US Bonds are safe and predictable, backed up by the immense military and resources of the nation. Investing in Apple 30 years ago would net a much higher return on $5k but even Apple was considered a unsafe investment in the 90s. On the other hand, Enron was considered a safe inves…
Bonds can "lose value" and they did so quite strongly in 2022/23.
If you bought 20-year bonds in 2020 for $100 they are worth $60 now (and were as low as $55 in 2023). Getting $1 per year is far from compensating the loss.
They will recover gradually until they "pay out" $100 but right now they're underwater.
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Well, your "5k" figure is still probably accurate. They had much larger minimums at launch.
I graduated in 1993 and going back through my old Quickbooks file, my 1993 IRA contribution went to a broad-based fund at Twentieth Century (now American Century). It was a half-year of working and all I could scrape together was $2000 and they accepted it to invest. I suspect making a mutual fund investment for $5000 (over $10,000 today) would have been possible three years prior.
Searching for "Vanguard S&P mutual fund minimum 1993" shows that many had a minimum of 3000? I'm guessing that is the same general search you were doing?
I'm torn, as I want to think this isn't wrong. However, I also remember you could buy a car for 10k EASY in the early nineties. Was a pretty decent sum to make in a year. Especially if it was on top of all other expenses. I'd also hazard that for many, getting a car to commute to a job would have probably been a better investment. (Of course... this is only true if you use the car for the added productivity.)