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Investing Returns on the S&P500

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Re: Investing Returns on the S&P500

#3

Post by vanderfluge »

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...

Re: Investing Returns on the S&P500

#4

Post by chollida1 »

Cool, this is very similar to what I had people do at one point as part of the interview process.

Give them a bunch of historical data

- find me the longest period that we would be flat/negative

- find the best time to invest

- find the optimal portfolio off stocks to hold over a given period.

I think I've said this before but I see too many people who think that they need to have a huge public repository of code to show off in an interview.

If you want to be a programmer at a hedge fund just having some very shallow analysis like the above would get a programmer to the top of the resume pile.

Now if you want to be a quant the bar is obviously much higher:)

Re: Investing Returns on the S&P500

#6

Post by stevenmays »

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.

Re: Investing Returns on the S&P500

#7

Post by yread »

Would be more interesting to compare it against a realistic return from a savings account instead of saying "if the index is worth the same after 20 years then you haven't lost anything". You would have almost 25% more even in a 1.1% savings account.

Re: Investing Returns on the S&P500

#8

Post by nicholas73 »

HorizonXP wrote: post #2

It's funny that this is so non-intuitive. My wife continues to try to "time the market" despite me telling her that it's pointless over such a long time horizon. Maybe this will help convince her.

This only showed that in the historical periods, one was virtually guaranteed to come out ahead over long periods. It does not disprove timing the market, though I think it can be shown why it's extremely difficult.

Re: Investing Returns on the S&P500

#9

Post by purplelobster »

HorizonXP wrote: post #2

It's funny that this is so non-intuitive. My wife continues to try to "time the market" despite me telling her that it's pointless over such a long time horizon. Maybe this will help convince her.

That's because most people (perhaps subconsciously) view the market as zero sum. What goes up must come down.
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