Market coming up on 2 years of flat.

[audreyh1]

A whole bunch of different stuff ? Can you give a specific Fund, Stock, Bonds, etc ? Thanks.

I'm very widely diversified. Mostly mutual funds. Ignoring the most volatile asset classes like high yield bonds, commodities, and emerging markets. A fixed asset allocation around ~55% equities with a modest international exposure. Rebalance as needed.

There was no single magic investment. No point in going into details.

 

[Fedup]

I had to reread some posts. I thought Audrey was up 15% YTD, from Jan to Dec 2015 meant Jan 2015 to Dec2015. I think she meant Jan 2000 to Dec 2015.
Phew, for a minute I thought I did something wrong because I was only up 6-7% last year.

 

[audreyh1]

I had to reread some posts. I thought Audrey was up 15% YTD, from Jan to Dec 2015 meant Jan 2015 to Dec2015. I think she meant Jan 2000 to Dec 2015.
Phew, for a minute I thought I did something wrong because I was only up 6-7% last year.

Yes, I was talking inflation adjusted growth in net worth over a 16 year time period since retiring. It's not the "return" either as plenty of money was spent over the same time period on taxes and expenses.

 

[NW-Bound]

The "2000" was missing in the original post, so I also took that as the 15% as return for the year 2015. Plus the thread was talking about the last 2 year performance.

I was down last year.

 

[audreyh1]

Oops - well I was responding to and quoted Mathjak's post where he was clearly discussing the S&P500 performance from Jan 2000 to Dec 2015. And my subsequent posts clarified it.

 

[Lsbcal]

Oops - well I was responding to and quoted Mathjak's post where he was clearly discussing the S&P500 performance from Jan 2000 to Dec 2015. And my subsequent posts clarified it.

I had no problem understanding your meaning. But then we've had some dialog on other threads about our actual sequence of returns. ReWahoo started one good one but I don't have the link.

 

[NoiseBoy]

I have about 6% of my portfolio in a 401(k) with TIAA-CREF from a previous job. It is 100% in equities, and I haven't made any deposits or withdrawals since 1998. Today, I use it as my personal equity benchmark because the returns include the costs for the funds (~0.5%).

My 18 year annualized return is 5.23% before inflation, with dividends reinvested, fees subtracted, and taxes not yet paid. The S&P 500 has returned 6.15% over that same period, but just 3.9% after adjusting for inflation. That means my real return for a 100% equity investment are right around 3% for 18 years. That is less than half of the historical S&P 500's real return.

Sure, others have had different results, but these matter to me, obviously. It's tough now, because I should be seeing large portfolio gains due to market returns since I'm nearing the end of my contribution period, but lately, most of the gains are from my new contributions and dividends. Kind of stinks, but what else can you do but keep chucking money away?

 

[NW-Bound]

100% in equities, and 1/2 the return of the S&P? One has to allow for some expenses, but that's too big a discrepancy.

I don't know what choices of investment there are inside TIAA-CREF, but if they are all lousy, can you move out to an IRA to have better alternatives?

Oh wait. Let's compare oranges to oranges. You: 5.23%. The S&P: 6.15%. It's not 1/2.

If you were comparing to the "historical return", then the S&P return since 2000 is also "historical", but in a bad way. They don't call 2000-2010 the "lost decade" for nothing.

 

[unclemick]

Rats! I've been semi-asleep at the switch after going mostly full auto life cycle funds 2006 and the Saint's finally winning a Superbowl I haven't been watching Mr Market as much.

1966 -2016 I should be used to the ups, downs and flats by now.

heh heh heh - Mr RMD has given me some mad money over yearly expenses perhaps re stimulate male hormones I may do some rank speculation unless I find a more fulfiling hobby.

 

[NoiseBoy]

@ NW Bound


Right. By historical, I meant the entire period that they have S&P 500 data for. That has a real return of between 6% - 7%, exclusive of investment fees.


I guess the point of my post was simply that the last 18 years, which constitutes the bulk of my investment contribution period, has not delivered historical returns, even for a "risky" 100% equity portfolio.

 

[NW-Bound]

And the period of 1982-2000 delivered stunning performance, but I was not 100% invested.

Some people are lucky, some are not. I am about average on the luck scale, I think.

 

[dixonge]

@ NW Bound


Right. By historical, I meant the entire period that they have S&P 500 data for. That has a real return of between 6% - 7%, exclusive of investment fees.


I guess the point of my post was simply that the last 18 years, which constitutes the bulk of my investment contribution period, has not delivered historical returns, even for a "risky" 100% equity portfolio.

Is your 100% equity portfolio 100% invested in S&P index funds or etf's? Because otherwise you have simply proven that it is extremely hard to outperform the overall market...

 

[Lsbcal]

And the period of 1982-2000 delivered stunning performance, but I was not 100% invested.

Some people are lucky, some are not. I am about average on the luck scale, I think.

We were invested during this period, all stocks. Best year was 1993 up 41% and 1995 wasn't bad either at 33%. Sorry for bragging but could not resist.

Someday the good times will return. Hard for many to imagine it now.

 

[Fedup]

I've been playing with the portfolio visualizer for back testing a few portfolios. And to my surprise, the portfolio with 100% SP500 didn't beat 50% VWENX and 50% VWIAX.
I tried a few in between because I didn't want to rely strictly on those 2 mutual funds.

 

[NW-Bound]

It probably depends on the period you test. In go-go years, conservative funds are hard pressed to beat the S&P. In terrible years, bonds rule.

 

[Lsbcal]

I've been playing with the portfolio visualizer for back testing a few portfolios. And to my surprise, the portfolio with 100% SP500 didn't beat 50% VWENX and 50% VWIAX.
I tried a few in between because I didn't want to rely strictly on those 2 mutual funds.

Bonds have had a declining rate environment since 1982. Don't expect that to continue indefinitely. FWIW, I'm 60/40 so not totally negative on bonds but would advise my son to me mostly equities.

 

[Fedup]

1985-present.

 

[NW-Bound]

That's 30 years till now. If you break it out, the two periods of 1985-2000 and 2000-2015 may look quite different.

30 years is not a long time, when we consider our working life. But that is a long time relative to what time many of us may have left on earth (we just do not know who will draw the short sticks, and there are more short sticks than long ones).

I am just trying to say that one can do one thing or the other, and who knows what's right or wrong. The future is not ours to see.

 

[Fedup]

True, that's why it's called back testing. Do we have a forward looking predictor yet?

 

[NW-Bound]

No, we don't. That's why I like to be diversified. I will never be 100% right, but there's also no chance of being 100% wrong. No 100% of anything for me.

 

[NW-Bound]

Bonds have had a declining rate environment since 1982. Don't expect that to continue indefinitely. FWIW, I'm 60/40 so not totally negative on bonds but would advise my son to me mostly equities.

Unless interest rates go negative, bonds cannot repeat the past performance. On the other hand, stocks are fully valued, so also have limited growth potential.

So, I stay diversified, and try to enhance the yield of my stocks and cash with options writing. I am making only small money with that, but when the expected returns are as puny as Boggle and Shiller predict, every bit helps.

 

[Lsbcal]

Unless interest rates go negative, bonds cannot repeat the past performance. On the other hand, stocks are fully valued, so also have limited growth potential.

So, I stay diversified, and try to enhance the yield of my stocks and cash with options writing. I am making only small money with that, but when the expected returns are as puny as Boggle and Shiller predict, every bit helps.

My feeling is that stocks have further to run. They might be fully valued but not overvalued. I wouldn't be surprised at a double digit gain year. Bonds are probably in worse territory.

But I don't really invest that way. More data driven.

 

[pb4uski]

See original post - I didn't pick a certain date, but rather when the SP500 first crossed the 2000 level.

It was first hit almost 2 years ago ( in July 2014) and here we are 2 years later pretty much at that same 2000 level.

Yes saw an up leg to 2131 and a down leg to around 1850 but it's been within that band now for 2 years now... And we've not seen a new market high in a year...

The bull usually ends with a whimper. I think we're whimpering ....

Your thread title says two years flat and you started the thread on 5/17 so I looked back two years. If you're going to use the title "two years flat" then either use the right reference dates or wait until July 2014 and see what happens or rename it 1 3/4 years flat.

 

[NW-Bound]

My feeling is that stocks have further to run. They might be fully valued but not overvalued. I wouldn't be surprised at a double digit gain year. Bonds are probably in worse territory...

I should not be surprised to see a double-digit gain either. But I should remember to tell myself to "sell, sell, sell...".

 

[Fedup]

I hope so, all my cash covered puts will be worthless.