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Old 03-10-2014, 03:39 PM   #21
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The low on the S&P 500 was 666. A bull market is a 20% rise off the low so that puts the bull at 799 for the S&P 500. I think we are in a secular bull that started 3/9/2009. You can have cyclical bear markets within a secular bull and that's what I'd say the 19% drop was, why quibble over 1%. This may well be like the secular bull from 1982 to 2000 and if it is it'll run another 10 or 15 years. We will only know in hind sight.
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Old 03-10-2014, 03:56 PM   #22
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According to Vanguard, the average annual return on stocks from 1926 to 2013 was 10.2%

https://personal.vanguard.com/us/ins...io-allocations

Hooray! So, why the hell are we planning for WR of 4%, 3%, even 2%? Ah, never mind. That was probably discussed to death in er.org.
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Old 03-10-2014, 04:03 PM   #23
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A secular bull market, as veremchuka suspects, would be fantastic. Here's hoping *fingers crossed*.
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Old 03-10-2014, 04:29 PM   #24
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Secular markets run in cycles, bulls last about 14-18 years and bears about 6-10 IIRC. Cyclical markets are a year or 2. We had an 18 year bull run from 82-2000 which is how I FIREd , a 9 year bear run from 2000 to 2009 and now I think we're in the next secular market which is a bull. You get cyclical markets within secular markets so you'll get bears within bulls and vice versa. If only we had a crystal ball eh?

I am a bit nervous and should rebalance but I keep shifting my AA between 40/60 to 50/50 to 60/40 so I'm not sure what to do cuz I don't know what my AA is (should be if I'm honest)! But I do think it's time to rebalance because I do believe in the long run this is how you win.
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Old 03-10-2014, 04:46 PM   #25
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Makes sense. I will drink to the secular bull market, 2014 being the 5th year and have another 15 years to go. That will make my ER very secure.
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Old 03-10-2014, 05:03 PM   #26
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According to Vanguard, the average annual return on stocks from 1926 to 2013 was 10.2%

https://personal.vanguard.com/us/ins...io-allocations
That is a nominal return. The real return (i.e. inflation adjusted) is about 3 points lower. A nice data source for real and nominal S&P returns with dividends is here: S&P 500 index - Bogleheads
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Old 03-10-2014, 11:13 PM   #27
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Here was Swedroe's take on expected return, given current valuations

Expected Stock Returns Around The Globe [SPDR S&P 500 ETF Trust, iShares MSCI EAFE Index Fund (ETF)] - Seeking Alpha

I don't bother with nominal rates. I use ~4% or so real on equity and 0-1% real on fixed. For my conservative 40/60 that gets me in the 2-2.5% real range for expected returns.
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Old 03-10-2014, 11:23 PM   #28
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The low on the S&P 500 was 666. A bull market is a 20% rise off the low so that puts the bull at 799 for the S&P 500. I think we are in a secular bull that started 3/9/2009. You can have cyclical bear markets within a secular bull and that's what I'd say the 19% drop was, why quibble over 1%. This may well be like the secular bull from 1982 to 2000 and if it is it'll run another 10 or 15 years. We will only know in hind sight.

That's what I am hoping for, woohoo!
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Old 03-10-2014, 11:27 PM   #29
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Secular markets run in cycles, bulls last about 14-18 years and bears about 6-10 IIRC. Cyclical markets are a year or 2. We had an 18 year bull run from 82-2000 which is how I FIREd , a 9 year bear run from 2000 to 2009 and now I think we're in the next secular market which is a bull. You get cyclical markets within secular markets so you'll get bears within bulls and vice versa. If only we had a crystal ball eh?

I am a bit nervous and should rebalance but I keep shifting my AA between 40/60 to 50/50 to 60/40 so I'm not sure what to do cuz I don't know what my AA is (should be if I'm honest)! But I do think it's time to rebalance because I do believe in the long run this is how you win.

My one learning point of the day...had to google IIRC. Now I'm am much wiser.
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Stop telling me the market is up 170%
Old 03-10-2014, 11:33 PM   #30
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Stop telling me the market is up 170%

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Makes sense. I will drink to the secular bull market, 2014 being the 5th year and have another 15 years to go. That will make my ER very secure.

Heck ya, I just signed up for Veremchuka's Investment Newsletter.
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Old 03-11-2014, 12:19 AM   #31
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I remember buying at the DOW 8000 level and friends just laughing at me. It was even hard for me, I refused to look at the markets myself and blindly maxed out my 401K contribution plus after-tax (which I recently roll-over to a ROTH IRA) - I was contributing 35% gross pay.

Then when the DOW clawed its way to 12,000 - the experts said that was the easy money. It wasn't easy - I even expected it to double dip like the great depression era. Then onto 16,000 - that seemed more like easy money to me. I remember May 6 last year when DOW hit 15,000, I woke up early to do my selling of all my 401K for preparing for the roll-over. Finally got out of 100% equities and now have a nice 70/30 portfolio with the 30 in short (less than 3 years) bonds. 8 years living expenses on the side!
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Old 03-11-2014, 12:30 AM   #32
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That's what I am hoping for, woohoo!
Easy now. The last thing we need is someone utteirng W2R's dreaded Wh** word......
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Stop telling me the market is up 170%
Old 03-11-2014, 02:09 AM   #33
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Stop telling me the market is up 170%

OK, the market is not up 170%.
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Old 03-11-2014, 09:06 AM   #34
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Easy now. The last thing we need is someone utteirng W2R's dreaded Wh** word......
Hey, I withdrew $50K from my portfolio to start my house-buying fund. I guess that was the anti-Wh**.

I could really use a secular bull market for the next 15 years. That would take me to age 80. I missed out on investing during the 90's (divorce, stupidity, etc) and I think a nice, strong, steady secular bull market through 2029 would be such fun.

Besides, it would be entertaining to listen to all the new, self-proclaimed investing experts who would probably appear on the board to "educate" us.
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Old 03-11-2014, 10:21 AM   #35
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Hey, I withdrew $50K from my portfolio to start my house-buying fund. I guess that was the anti-Wh**.

I could really use a secular bull market for the next 15 years. That would take me to age 80. I missed out on investing during the 90's (divorce, stupidity, etc) and I think a nice, strong, steady secular bull market through 2029 would be such fun.
I had forgotten that you started your house-buying fund and withdrew money. That's it then - the perfect indicator that we are in a secular bull. The anti-Wh** - I love it!

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Besides, it would be entertaining to listen to all the new, self-proclaimed investing experts who would probably appear on the board to "educate" us.
A 15 year secular bull would probably convince me that I was the world's smartest investor. That's OK - I'll take the chance that I'll make myself look foolish in front of you all if the reward is the steady march of my portfolio upwards. It's a small price to pay
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Old 03-11-2014, 10:35 AM   #36
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Besides, it would be entertaining to listen to all the new, self-proclaimed investing experts who would probably appear on the board to "educate" us.
The market can go down..........
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Old 03-11-2014, 01:53 PM   #37
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The market can go down..........
Wait, WHAT?
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Old 03-11-2014, 10:39 PM   #38
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The market can go down..........

Housing will never go down... :-D
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Old 03-12-2014, 08:00 AM   #39
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The market can go down..........
"This time it's different".
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Old 03-12-2014, 09:34 AM   #40
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Here was Swedroe's take on expected return, given current valuations

Expected Stock Returns Around The Globe [SPDR S&P 500 ETF Trust, iShares MSCI EAFE Index Fund (ETF)] - Seeking Alpha

I don't bother with nominal rates. I use ~4% or so real on equity and 0-1% real on fixed. For my conservative 40/60 that gets me in the 2-2.5% real range for expected returns.
Your expectations fall in line with this article I read yesterday.

http://online.wsj.com/news/articles/...mod=yahoo_free

"Strip out these one-off gains and inflation, Rob Arnott recently suggested, and investors ought more realistically to expect about 1.5% a year plus dividends—meaning, in the current environment, an annual return of about 3.5% in real terms. That's a far cry from 10%."
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