How do index funds work

[Anonymous No.53960903]

Let's say I have 2 million dollars and I hire a financial advisor at a big company like Morgan Stanley to go all in on index funds for me what are the odds I lose my money?

The return on the S&P in 2008 was -35% but the return in 2009 was 25%. Does this mean I would have made no money on returns in 2008 and my 2 million would only be 1.3 million? But in 2009 I would have made 325,000 dollars? So in that case I should live off 100,000 that year and put 225,000 back into my index fund to try and get back to 2 million?

This is all safe as long as my financial advisor doesn't sell my shit at the bottom right?

Looking at the chart the last 5 years have been pretty good.

>2022 -18.11
>2021 30.92
>2020 18.40
>2019 31.49

So even with only 1 million dollars I would have made since 2019: 300k, 180k, 300k, and -180k???

Wtf... Can I make it with only a million dollars as long as I get lucky and get a string of 3 or so good years like this and save 100k a year in case of a bad year?

[Anonymous No.53960919]

>>53960903
bocchi the npc

[Anonymous No.53962176]

>hire a financial advisor... to drop money into index funds
WTF am I reading

[Anonymous No.53962288]

>>53962176
I don't know how to do it myself

[Anonymous No.53962340]

Yes anon, when interest rates were 0 and the government was printing the most money in history the stock market did very well. And no, it isn't quite that easy. You don't get to buy every bottom, so likely you would not have those gains. Over the very long term yeah, stock indexes do very well with very little effort, but looking at yearly returns isn't everything. You'd need to be able to weather a big crash and still buy when it is cheap. That's very hard when you get caught in a correction/crash. If you bought every monthly bottom during dot com you wouldn't break even until 2004, 2011 for the GFC. If you can survive and average down during that time the spoils will be yours, but if you sell at a loss it'll feel real bad.

[Anonymous No.53962377]

>>53962340
This is why I wanna hire someone from Morgan Stanley

[Anonymous No.53962452]

>>53962377
I have bad news for you anon. Professional money managers are not smarter than you. They may not even be fudiciaries. Just open a Vanguard account, put everything in VOO or VTI, and live off the dividends assuming you aren't a city slicker 1.5% divy payout on 2 million will keep you fed and you can let your money sit and accumulate with the larger index without doing anything. You could do this with any other brokerage too, but, you want to make sure there isn't any inactivity fees.

[Anonymous No.53962465]

>>53960903
do this, or hold cash until the market collapses or something

[Anonymous No.53962486]

>>53962452
1.5% on 2 million is 30k a year. I would still have to wage.

[Anonymous No.53962516]

>>53962486
Bro get your expenses in order fr fr.

[Anonymous No.53962517]

>>53962288
lol have you heard about "reading" or "educating yourself"?

[Anonymous No.53962546]

>>53960903

S&P 500 has averaged a bit shy of 11% annual growth over the last ~100 years. You'll be up most years and down big others, but over the long run that's what you can expect.

Also like other anons have suggested, just open a Vanguard or Fidelity account or something and invest in index funds yourself. There isn't much to it, if you're doing something simple like just sticking it all in an S&P 500 ETF, no need to pay someone else additional fees and commissions.

[Anonymous No.53962571]

>>53962517
Yeah but I don't want to do that
>>53962516
If I make 30% on 2 million that's 600 thousand dollars. I can live off 100k, put 200k in Bitcoin, and then save 300k which is enough to live off of for 3 years if the market dumps. Why wouldn't I do that instead of making only 30k a year? That's almost below the poverty line in every state.

[Anonymous No.53962579]

>>53962546
While I'd usually agree, I think the markets are instable right now - so if he wants to live off of it asap, he should educate himself and learn how to hedge / DDD etc.
.. or just lose about 20-30% over the next 5 years, if not exceedingly lucky.

>>53962571
if you don't educate yourself financially, you'll fail, anon. I've lost a lot of money before I learned how to handle it properly.

[Anonymous No.53962585]

>>53962579
Yeah that's why I wanna hire Morgan Stanley

[Anonymous No.53962595]

>>53962585
Well, if you have upwards of 20mio you can buy into familyfunds or some real hedgers, then it's worth it.
before that they're just dumping your money into S&P 500 stocks, some growth titles maybe and average a little below the market and still take a cut on top of it.
If that sounds like a perfect fit, GL, go for it.

[Anonymous No.53962660]

>>53962585
They'll bleed you dry with fees and shitty returns because they know you're too incompetent to do any better. Then you'll go across the street thinking their competitors might do better, when really you should have been running this shit on your own the whole time.

[Anonymous No.53962765]

I imagine buying an index fund is a lot easier than getting a money manager

[Anonymous No.53962788]

>>53962486
There are actual cds and off branch banks that offer risk free 4-5% returns i think a u.s treasury bond rn is 6% on 1million thats 60k 2 million would be 120k. If the rates fall simply invest into some realestate, buy a couple houses for around 150k each give or take rent them out for 8-1k a month then you have equity and are making 60-100k a year all while still have all ur money into apreciating assests you can sell at anytime. Once u have 1million you have to be a fucking moron to fuck up and loose it all.

[Anonymous No.53962963]

>>53960903
>>53962377
>>53962585
is this a spambot for (((morgan stanley)))?

[Anonymous No.53964059]

>>53960903
https://www.dextools.io/app/en/arbitrum/pair-explorer/0x36970fc0dc6f3e21C924997bdf4DF2a790dDF503? get your ass in here we are going to the fucking moon!

[Anonymous No.53964133]

>>53960903
https://openbetai.io/ https://openbetai.io/ https://openbetai.io/ https://www.dextools.io/app/en/arbitrum/pair-explorer/0x36970fc0dc6f3e21C924997bdf4DF2a790dDF503? get your ass in here we are going to the fucking moon!

[Anonymous No.53964268]

>>53960903
https://openbetai.io/

[Anonymous No.53964397]

The year is 2035, you enter your local 7/11 to buy yourself a g fuel before your shift in the local crypto mine. The android working the counter says they only accept OpenBetAI token. You pull out your phone, draw a stick man in less than five seconds on a yellow back ground and then sell it as an NFT. From the sell you make 6 OpenBetAI token, about 5 million dollars in old world money. You go to buy the drink only to find out that from the time you closed your phone to the time you talked to the cashier the coins had dropped in value to only 3 dollars per coin and you now owe at least 10 OpenBetAI token to the robot for the gamer fuel. You leave the store, frustrated, and drive off in your Tesla................https://openbetai.com

[Anonymous No.53964417]

>>53960903
Ah, it explains everything. I'm an NPC in a dormant state who awakens only when some player needs assistance.
Now, how do I extract souls from real humans?

[Anonymous No.53964761]

>>53962579
>lose about 20-30% over the next 5 years
Care to expand on it? Are you referring to the S&P 500? I'm thinking about the same but /smg/ anons seem to think it'll crash (later) this year.

[Anonymous No.53965034]

>>53960903
>I hire a financial advisor at a big company like Morgan Stanley to go all in on index funds for me
The point of index funds is that you don't know a financial advisor to pick stocks for you. That's not to say you can't hire one, but he won't pick stocks, he'll just throw it into SPY or MSCI and simple as.
>The return on the S&P in 2008 was -35% but the return in 2009 was 25%. Does this mean I would have made no money on returns in 2008 and my 2 million would only be 1.3 million?
2M*(1-0.35)*(1.25) = 1.625M
You don't "make money" holding an index fund in general, 1.625M is the trading price if you decide to sell at that point.
>This is all safe
No asset is "safe" in the ultimate sense. People just tell you that it is based on some decades of experience. There's nothing magically preventing the S&P500 from going down 95%.
>This is all safe as long as my financial advisor doesn't sell my shit at the bottom right?
He's not a fund manager, he doesn't sell anything. He just advises you on what to do. It's just advice, you're not forced to do it.

[Anonymous No.53965042]

>>53962516
Those Funko Pops are expensive, anon.

[Anonymous No.53965410]

>>53962963
one time someone from that fucking company managed to get through my corpo's phone operator to directly call my extension in the middle of the work day to cold-call me about giving my money to them
how can they possibly lack the self awareness to realize the problem with this

[Anonymous No.53965430]

>>53965034
>There's nothing magically preventing the S&P500 from going down 95%.
Pfff