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Old 07-07-2014, 06:18 PM   #41
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But rebalancing makes you buy low sell high.

And that's the way to make money when the market jumps up/down like in the past 15 years. When it went straight up like the long bull period of 1983-2000, rebalancing meant keeping on selling year after year, and you now trail the market index. You would do far better just to buy and hold.

What I am trying to say is that people tend to extrapolate from recent history as to what method will work.

I do not claim to know, and in fact realize that I do not know. So, when people claim a certain way will always work, I look in the past to see if that method is truly universal. And I am not so convinced.
But it din't go straight up 1983-2000. There was a major (but short lived) crash in 1987, and significant unpleasantness in 1990 and 1994. A good deal of the marvel of that period actually took place in the last 2 years, particularly 1999 which really was off the charts. (we know what happened then).
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Old 07-07-2014, 06:31 PM   #42
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True. But the well-known crash of 1987 was fairly mild compared to the Great Recession. And I also remember the even milder crash of 1998 being caused by the Long Term Capital crisis. I do not remember the 1990 and 1994 periods.

During that period of 1980-2000, I was accumulating, and did not pay that much attention to our 401K's because I was too busy with work. No rebalancing at all. Worked out great!
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Old 07-07-2014, 06:31 PM   #43
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But it din't go straight up 1983-2000. There was a major (but short lived) crash in 1987, and significant unpleasantness in 1990 and 1994. A good deal of the marvel of that period actually took place in the last 2 years, particularly 1999 which really was off the charts. (we know what happened then).
S&P 500 Return Calculator - Don't Quit Your Day Job...

I get 14% annual return 1982-1997
I get 11% ....................1982-1999

But anyway that all was part on one huge SECULAR bull market.....
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Old 07-07-2014, 06:40 PM   #44
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One of the charts in the article Why trading volume is tumbling, explained in 5 charts shows tremendous growth since 2007 in index funds and exchange traded funds that track indexes.
So, trading volume is low, and that explains the recent low volatility.

But there's no guarantee that the volume will not pick up and go sky high to make up for the recent past low activity.

Hey, I am not wishing ill here, as I am in the market as everybody else. Just saying that it would not surprise me if the market gets roiling again.
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Old 07-07-2014, 06:45 PM   #45
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S&P 500 Return Calculator - Don't Quit Your Day Job...

I get 14% annual return 1982-1997
I get 11% ....................1982-1999

But anyway that all was part on one huge SECULAR bull market.....
Thanks, that's a fun calculator. I get 24.5% annualized for 1998-1999 those were the days!
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Old 07-07-2014, 06:55 PM   #46
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Thanks, that's a fun calculator. I get 24.5% annualized for 1998-1999 those were the days!

I get 8.973 1871-now

As a first generation immigrant I must say this is a great country and many good years are in front of us. And 8.973 is plenty for me
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Old 07-07-2014, 07:46 PM   #47
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1871? That's way before my time.

I started working at a real job and making good money in 1980 to save, so only the period from 1980 till now counts for me.


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Old 07-07-2014, 07:57 PM   #48
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1871? That's way before my time.

I started working at a real job and making good money in 1980 to save, so only the period from 1980 till now counts for me.


So, if things have been so terrible since 2000, how come most of the ER's @ this board are doing just fine? I would guess most of the ER posters here have retired since 2000...
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Old 07-07-2014, 07:58 PM   #49
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Eh, that's why I said they are closet day traders, while proclaiming to be buy-and-holders, etc., etc...
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Old 07-07-2014, 08:47 PM   #50
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So, if things have been so terrible since 2000, how come most of the ER's @ this board are doing just fine? I would guess most of the ER posters here have retired since 2000...
There is a secret there to be discovered by the patient.
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Old 07-08-2014, 04:19 AM   #51
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So, if things have been so terrible since 2000, how come most of the ER's @ this board are doing just fine? I would guess most of the ER posters here have retired since 2000...
Well even though it was bad 15 years it still had positive return beating inflation.

Also I don't think there is anybody who held only S&P 500. People usually had some Emerging Markets, some Small Caps, some Bonds and such portfolio had more likely 8-9 % return which is more then plenty to make you FI if you are LBYM.
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