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But what if stocks had not just a rough year or two, but a dismal stretch for over a decade
I'm a little confused. Roger about VOO. But I'm looking at funds I was in in the first decade of this century, charting TWEIX, JENSX, FPACX, JABAX, and FASMX from the century's first trading day through the end of 2010.
(You could move the start or endpoint to make it an even 10y if desired and make the performance a bit worse, I believe.)
For the 11y span I specify, though, the growth ranges from up almost half (Fidelity, not so great, but sure better than SP500's nominal breakeven) to >~60% (Jensen and Janus) to way more than doubling (TWEIX, +133%) and finally to First Pacific, winning at +215%.
As always, I was inconstant, not a faithful or steady investor, as I recall, so I did not see all of these gains. But this active management was often pretty impressive for such a tough time.
Using Backtest, if one started with $1m in 2000 using 50/50 SPY/VBMFX (BND was not in existence) and took all income, rebalanced yearly, one ended up with slightly over $1m in 2010 and a decent income stream (positive TR). It's all we have to foretell the future. A couple of mistakes trading in 10 years to make a good TR could have been serious.
I had an edit; The decade was 2000 to the end of 2009, not end of 2010. The results were a little different. The average income was the same but the $1m was short $37k. Still not disastrous.
If what makes you comfortable is the only (or main) criterion why are we spending so much time here? Investing is all about performance...or...other investors are looking for better risk-adjusted performance. I have a neighbor who is a multi-millionaire since the early 90s. He invested over 90% in Munies and the rest in stocks. So, he is very comfortable. Was that a great choice? Actually, he could be all in MM and still would do great.
BTW, I have been discussing high-income investing since 2010. They look good for a while and then they don't. First, it was VZ,ATT,IBM against SPY,QQQ or MSFT, AAPL Second came MLP which got crushed. Third came CEFs and they made so much less than SPY,QQQ in the last 5 years.
If you can prove that very high-income investing has better performance or even better risk-adjusted performance, I'm listening.
We are spending time here to learn from one another if we can and maybe, just maybe, find something that might make us even more comfortable.
I don't believe that anyone has suggested that very high-income investing has better performance or even better risk-adjusted performance. They may have said that it makes them happy however.
We are spending time here to learn from one another if we can and maybe, just maybe, find something that might make us even more comfortable.
I don't believe that anyone has suggested that very high-income investing has better performance or even better risk-adjusted performance. They may have said that it makes them happy however.
No need to go far. Read Charles Lynn Bolin on this site. He posted well-thought articles about risk, reward, and markets which cater to different goals. These are all based on analysis, numbers, and logic.
We are spending time here to learn from one another if we can and maybe, just maybe, find something that might make us even more comfortable.
I don't believe that anyone has suggested that very high-income investing has better performance or even better risk-adjusted performance. They may have said that it makes them happy however.
Exactly Mark. Your saved money is there to provide for you however best it works for you. There is no one and perfect way.
Comments
(You could move the start or endpoint to make it an even 10y if desired and make the performance a bit worse, I believe.)
For the 11y span I specify, though, the growth ranges from up almost half (Fidelity, not so great, but sure better than SP500's nominal breakeven) to >~60% (Jensen and Janus) to way more than doubling (TWEIX, +133%) and finally to First Pacific, winning at +215%.
As always, I was inconstant, not a faithful or steady investor, as I recall, so I did not see all of these gains. But this active management was often pretty impressive for such a tough time.
Inflation over my span was ~31% total, 2.5%/yr.
Investing is all about performance...or...other investors are looking for better risk-adjusted performance.
I have a neighbor who is a multi-millionaire since the early 90s. He invested over 90% in Munies and the rest in stocks. So, he is very comfortable. Was that a great choice?
Actually, he could be all in MM and still would do great.
BTW, I have been discussing high-income investing since 2010. They look good for a while and then they don't.
First, it was VZ,ATT,IBM against SPY,QQQ or MSFT, AAPL
Second came MLP which got crushed.
Third came CEFs and they made so much less than SPY,QQQ in the last 5 years.
If you can prove that very high-income investing has better performance or even better risk-adjusted performance, I'm listening.
I don't believe that anyone has suggested that very high-income investing has better performance or even better risk-adjusted performance. They may have said that it makes them happy however.
+1 @Mark
But if you already know everything there is to be known ….
Some YTD numbers for the first 7 months of 2023 along with the annualized rate of increase …
NASDAQ +36.79% YTD (Annualized= +63%)
S&P 500 +19.34% YTD (Annualized = +33.15%)
DOW +6.98% YTD (Annualized = +12%)
STOXX (Europe) +17.74% (Annualized = +30.4%)
Nikkei 225 (Japan) +25.54% YTD (Annualized = +43.80%)
Most EM markets have done well. Argentina sports a +126% YTD increase, which corresponds to an annualized rate of +216%
(Data from Bloomberg)
Than there’s this from January 2 : ”2023 to be a tough year: IMF”
https://www.mutualfundobserver.com/discuss/discussion/comment/158208/#Comment_158208