/biz/ - Business & Finance

>>209192

look at that chart, stocks are going to the MOON!

It's NEVER a bad time to invest. Think about if you were living in Jan 95. You might not invest because the market was at record highs. Well look at what happened between then and Jan 2000...

Invest as much money as you can as soon as you can at all times. Given you have debt, emergency fund, short term goals (house) all taken care of.

Also why you like the global markets so much? You dont like america? Vanguard Target 2055 (or your age) for lyfe. You aren't smarter than that allocation.

>>209216
no, it's going to crash hard.
Just wait now, so you can panic buy latter.

>_<

STOP.
LOOKING.
AT.
CHARTS.
LINEARLY.

lern 2 not pleb.

>>209192
Massively over-weighted in internationals, and no allocation to mid- or small-caps. Ick.

Fix your allocations, then get on board. For the long run. Its called "buy and hold", not "buy and get skittish if there's a correction".

>>209242
How do you look at them then?

>>209212
>>209270
Thanks bros. As much as I agree, Bogle himself said that stocks will soon drop 25%, maybe this is the time to just invest in bonds, and get on board with stocks after the correction

>>209286
Logarithmically.

That's a horrible portfolio. Put 50% in stocks, with 20% in each sector. Buy some commodities in crude oil, it's currently low. Put the rest in ETFs

>>209291
How do you look at it like that visually? Wouldn't that just be following the curve?

>>209284
People said that at the end of 2012 too. And they missed a 30% gain.

I'm not saying a correction won't occur. Statistically speaking its a certainly. But no one (including Jack) knows when it will be, how big it will be, and how long it will last. And no one knows what gains you might lose waiting for it happen.

I never understand how people can understanding that market timing is a bad thing, but then wait to invest because a more opportune time *might* be coming down the road. That's literally the definition of market timing.

Good luck however and whenever you invest.

>>209270

Buy and hold can be just as dangerous as market timing.

>>209318
>Buy and hold can be just as dangerous as market timing.
There are no guarantees in life or in investing. You can lose money through buy and hold, of course. All investing has risk.

But peer reviewed studies have shown that people attempting to time market overwhelmingly pick horrible entry and exit points. Most people who try to "beat the market" fail miserably, including most Wall Street money managers.

By contrast, studies show that buy and hold tends to be a reliable means of tracking the markets as a whole, which over the long run have yielded 12-14%.

In sum:

Market timing: high risk, likely to under-perform, small chance to beat the markets.

Buy and Hold: low risk, likely to track market performance.

Pick whichever you like.

>>209312
Kind of, though it's difficult if the chart doesn't do it for you automatically. Most charts have settings to take care of it.

Look at this chart:
http://finance.yahoo.com/echarts?s=DDD+Interactive#symbol=ddd;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

Now compare it to this one:

http://finance.yahoo.com/echarts?s=DDD+Interactive#symbol=ddd;range=2y;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=on;source=;

They tell very different stories, right?

Always look at charts like that to get the real picture.

>>209344

>which over the long run have yielded 12-14%.

topkek

>Buy and Hold: low risk, likely to track market performance.

But buy and hold isn't low risk. That was my entire fucking point. Tracking the market doesn't mean anything when the market falls.

>>209363
>>which over the long run have yielded 12-14%.
>
>topkek

The S&P 500 has averaged an 11.5% return between 1928 and 2013. Dividends yield another approximately 2% return per annum. So 13.5% return, average.

http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html

A long-term investor doesn't care if the market falls. It doesn't change what we do and how we approach our investing goals. Markets go down, then markets go up. And so on. Historically, however, they have gone up more than they've gone down (by 12-14%). That's all we care about.

Good luck with your stock picking and your market timing.

>>209432

>The S&P 500 has averaged an 11.5% return between 1928 and 2013. Dividends yield another approximately 2% return per annum. So 13.5% return, average.

Geometric returns are what you actually receive and are only 9.55%. Throw in your 2% that's 11.55%. Never mind the fact that index funds didn't exist until year end 1975. So the 1928-1975 return is hypothetical to a buy&holder. This is all before inflation and taxes.

>A long-term investor doesn't care if the market falls. It doesn't change what we do and how we approach our investing goals. Markets go down, then markets go up. And so on. Historically, however, they have gone up more than they've gone down (by 12-14%). That's all we care about.

With multiple decade-plus long draw downs along the way. And considering the fact that most people only invest for 20 yrs tops that's a big risk.

>>209478

>Conventional advice would counsel starting your retirement savings no later than age 25

I know 0 people that have done that.

>>209363
Jesus fucking christ you're stupid.

>>209462
>considering the fact that most people only invest for 20 yrs tops that's a big risk
[citation needed]

Anyone who only invests for 20 years got a very late start. Conventional advice would counsel starting your retirement savings no later than age 25 and continuing through retirement (normally, age 65). Where you come up with 20 years is beyond me.

>>209478

>my advice holds a higher point then statistics

I don't know why you guys make minimum wage at McDonald's. I just got hired here in North Dakota at $15/hr.

>>209484

How is buying at the top in 29,73,00,07 not a legitimate risk? The draw down from 29 lasted 26 yrs, 73 - 10 yrs, 00 - 13 yrs. What if I retired during those draw downs? Sucks for me right? But but buy & hold has low risk.

>>209483
>I know 0 people that have done that.

I'm sorry that your friends and family are so financial uneducated. You're obviously a Kevin, not a Leandra.

would it be a bad Idea to day trade upwards of half my investment ?

>>209496

Your advice still negates that nobody in America saves for retirement until they start thinking about retirement. Usually around age 40. They would much rather "invest" in 4 kids at 20 years old and a mortgage, 2 car loans, and 4 credit cards by 30.

>>209496

No I live in the real world.

It's a good time to invest, bro. Don't listen to the naysayers. They've been advertising an imminent decline since the last recession ended. Stocks are fairly valued now, and I would anticipate continued growth. No reason to expect past history will repeat. We've entered a new paradigm of productivity that will keep the market rolling upwards indefinitely. Might as well hop on board :)

>>209505

Well I bet if you ask people would your rather not have your kids and have 10 million dollars or have your kids and be stretched financially, they'd chose their kids.

>>209496
Most people have more important things to buy in their twenties. You may have gotten a job paying 100k, but if you have a "normal" job then you are better served starting out saving for a house, car, wedding, etc

Also, that image is worthless since it doesn't account for inflation.

>>209505
>>209508
>>209523
This is just sad. You three are actually going to propagate bad financial advice to other people just because you don't have the wisdom to start saving early, like every financial expert advises. Wow.

If you don't have the the wisdom and self-respect to make retirement savings a priority, then I really can't relate to you at all. Good luck with your finances and your retirement prospects.

>>209532

Everyone already knows this advice. They just don't do it because their life gets in the way, autist.

>>209515
"new paradigm"

>>209532
The fact that you posted that picture shows you have no understanding of money. Just stop.

>>209546
If you really think inflation somehow negates the efficacy of compounding in a diversified long-term retirement portfolio, you should get a refund on your GED.

Start saving, early. Make it a priority. No one wants to see you as a 70-year old making fries at McDonalds.

when the private investors and small players start to invest the crash is near

>invest when the money is scared and private investors arent investing

>dont invest when the public is interested in stock market

it is pretty bad time for stocks atm, but you can use asia / china etc.. where they might have better growth next years

>>209555
Leandra, in that picture, is investing MORE a year when she is 25 than Kevin is when he is 60.

If you think this is a reasonable model of how much free income people have to invest as they age, you're retarded.

>>209532
>dat feel when parents helped me open retirement fund at 18
I seriously am so thankful

>>209563
Inflation may erode the purchasing power of Leandra's savings, but that doesn't mean you get to mark-up Leandra's contribution. If Leandra has $2000 in 1974, the purchasing power of that $2000 erodes over time regardless of whether she invests it, buys a house with it, or puts it in her mattress. The same applies to Kevin, who spent his money on something else, apparently. Inflation applies to both of them.

The relevant question is who did a better job offsetting inflation. Unless Kevin was late to the investment game because he was getting double digit returns elsewhere, then Kevin falls behind Leandra.

I'm sorry you don't have as much income as you would like. I'm also sorry that you don't understand finances very well. I hope that your situation changes for the better.

Right now is great for young investors because you can just accumulate assets that will eventually go up. Boomers are the ones getting fucked by the last 7 or so stagnant years because they're looking to cash out soon.

>>209595

>Inflation may erode the purchasing power of Leandra's savings, but that doesn't mean you get to mark-up Leandra's contribution.

Yes it does because it would have been harder to get $2000 back then since it represented more purchasing power.

>>209595
If we assume that people invest any extra income they have, after necessities and other investments (and buying a house IS an investment), you're assuming that Leandra is making almost as much at 25 as kevin is at 40
>I'm sorry you don't have as much income as you would like. I'm also sorry that you don't understand finances very well.
You know nothing about me, but I guess I can understand that you're getting desperate at this point.

>>209604
>>Inflation may erode the purchasing power of Leandra's savings, but that doesn't mean you get to mark-up Leandra's contribution.
>
>Yes it does because it would have been harder to get $2000 back then since it represented more purchasing power.

For purposes of the chart, Kevin and Leandra are starting at the same place. Assume equal incomes and equal ages. All things are are equal, except Leandra commits some of her income towards savings, while Kevin is buying vidya and cars.

They're both affected equally by inflation. But Leandra comes out ahead because she's invested in as asset that outpaces inflation. Kevin did not. Thus, Leandra wins.

>>209613
>You know nothing about me
You said that $2000 was an unrealistic amount of money for a 25 years to save.
>If you think this is a reasonable model of how much free income people have to invest as they age, you're retarded.
I disagree. I don't think $2000/year is too much for a 25 year old to save, on average. While there are some who won't meet that, it hardly seems like an outrageous assumption, as you imply. Therefore, I assumed your finances were limited. No offense was intended.

>>209494
That comes down to asset allocation, ya dingus.

As you get closer to retirement, you move a greater proportion of your assets away from relatively risky equities into less risky bonds, and finally into easily accessible, low risk liquid securities and term investments.

Anyone over 40 who is 100% invested in equities is playing a dangerous game.

Portfolio asset diversification, dog.

>>209627
>You said that $2000 was an unrealistic amount of money for a 25 years to save.
I did not.
> I don't think $2000/year is too much for a 25 year old to save, on average.
I never said, or even implied that. I implied that the image is worthless, because it is. If you want to compare the two strategies, you need to compare how much they invested in purchasing power. For Leah, for example, you would want to sum (two thousand 1979 dollars converted to 2014 dollars) + (two thousand 1980 dollars converted to 2014 dollars) + etc etc.

>>209644
I'm sorry. I didn't realize that in your world, inflation can somehow affect only one of two equally situated people. I'm sure that you've done the math correctly, according to the made up rules that govern the unrealistic thought experiment in your head.

By all means, continue to rail against convention investment wisdom. Delay your retirement savings. Time the market and pick your stocks. I tip my fedora to you, edgy sir.

>>209657
Well then feel free to calculate how much they both invested in purchasing power and compare that instead. Claiming Leah put aside "$30,000 less" is bullshit, because in terms of purchasing power, she may even have invested more money total.

>>209192
wait for the down year and buy the fucking dip after that

>>209192

Some Anon just put these ticker symbols up in another thread and I'm thinking it might actually not be a bad idea to play around with them.

RIGH
RFMK
ENDO
HESG

This is a more expressive graph of OP's underlying data.
As stated before, exponential growth is better displayed on a logarithmic diagram.

>>210851
thinking about long term is fine but you are looking at over 200 years

The earlier you start investing the better. More time for your money to compound. Forget a three fund portfolio, just buy a cheap stock market index fund. Reinvest dividends and keep adding as you go. In 40 years time, you'll be worth millions.

>>210851
pre 1900 date is so inacuret its useless

>>210851
the problem is that in recent times it looks to have flattened out

and there are very recent peaks right before plunges
look at the high in 2000, the market took 7 years to recover from that drop, and then it plunged once again
it's been 6-7 years since the crisis, the S&P has now surpassed the previous high in 2007.

OP should be worried about another drop

>>209192
why dont you do what all the big players are doing and go short on SPY

>>209192
I think you would benefit from selecting better ETFs.

>tfw Gamma arguing with haz
>tfw not sure who to listen to

>>211248
"go with what you know"

means go with what *you* know

>>209242

>exponential growth can continue forever

look at this faggot

>>209242

So shall I just put all my monies into SPY?

>>213583
I think, that the universe likely is bigger than the timespan to grow into it.

great time to invest, terrible vehicle. migrate to your natural tax habitat, as my prof would say. that means, you dont want to be invested in global etf's if you get taxed heavy. efficient markets say that the return compensates you for risk. so the higher return in global markets also come from higher risk.

I am canadian from toronto, and I would do 100% XDV, or 50% XDV and 50% XIU.

them low fee etf's my nigga, plus canadian tax advantages from capital gains, plus dividends. dat 8% return.

>>209242
nice misleading graph faggot

>>209666
do you realize the point of saving for retirement is to get your money back (+ more) later.................

it shouldn't matter what the purchasing power is, whatever you would have bought back in 1979 (excluding investments, which is essentially the same as saving for retirement but through a different means) would have depreciated way more quickly than the value of a dollar

for example dvd players in 1997 were like 1000 and now i'd make fun of you for having such shitty things in your house