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View Poll Results: What will be the stock market growth in the next 7 - 10 years?
-5% - 0% - Doomsday, we will be hit by a Great Depression. God help us. 4 5.56%
0% - 2%+ - We’ll be hit by a mild/regular recession and then market can recover but is flat 7 9.72%
3% - 5%+ - Low Growth – the market ain’t like it use to be, but still growing just above inflation 32 44.44%
6% - 8%+ - While I'm conservative in my plans, it will be like the Average growth for the past 80 years 25 34.72%
9% - 14%+ - The Technology Revolution, just like the Industrial Revolution, will take us higher 4 5.56%
Voters: 72. You may not vote on this poll

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Old 04-24-2016, 08:07 AM   #41
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Regarding the fallacy that "no one can predict future market returns" we'll go back in time and recall this thread I started on March 7, 2009 a day or two from the ultimate market bottom . . .



The analysis is no different today. It's the conclusion that's different.

Folks pushed back then. They push back now. I'll keep doing what I'm doing which is working quite well.
That threat was called "Why I'm Not Selling Stocks Now" not "Why I sold before crash and now I am buying"

But look if you possess investing skills that surpass 99.9 of professional money managers then who can argue with you.

Most of us do not possess market timing skills to enter market with days of generational low.
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Old 04-24-2016, 08:29 AM   #42
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That threat was called "Why I'm Not Selling Stocks Now" not "Why I sold before crash and now I am buying"
That is indeed the title. And I admit I didn't buy on that day . . . I bought SPX, mid-cap, small-cap, international equities and REITs on March 2, 2009.
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Old 04-24-2016, 08:51 AM   #43
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Originally Posted by Gone4Good View Post
But that includes reinvested dividends and it's not clear whether the question was about Total Returns or the level of the S&P. So the S&P index price growth is probably in the <2% area.
So my response assumed nominal returns (no dividends) not adjusted for inflation. What was the intent?
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Old 04-24-2016, 09:19 AM   #44
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But look if you possess investing skills that surpass 99.9 of professional money managers then who can argue with you.
I don't have the same goals as a professional money manager.

From the lows of 2009 until 2015 generic equity investments generated a compound annual return of around 17%. I now have far more money than I thought I'd have when I retired in 2010. I can bank those gains and live off them for a very, very long time.

A portfolio manager can't do that.

More than that, if next year the market returns -15% and the professional money manager returns -13% that's a huge win for him. I don't see it that way.

Meanwhile, if the market returns 15% and I earn 2%, I'm still sitting pretty. Not so for the money manager.

The way I figure it based on the returns I've already banked even if I go 100% into CDs now, which I'm not doing, my break-even to an 8% equity market return doesn't happen until sometime in 2023. I didn't start my retirement planning on 8% equity returns. So I have a very long window with which to beat my retirement plan return rate. And personally, I don't think it's a huge gamble to bet we'll have another bear market between now and 2023?

I don't measure success the same way a professional money manager does. I'm not sure why I'd use him as a meaningful comp.
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Old 04-24-2016, 09:33 AM   #45
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And personally, I don't think it's a huge gamble to bet we'll have another bear market between now and 2023?
Not for you because you know how to get into bull market within few days of its start.

But as I said this is not something that many people are capable to do.
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Old 04-24-2016, 09:48 AM   #46
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Not for you because you know how to get into bull market within few days of its start.

But as I said this is not something that many people are capable to do.
I do plan on buying equities (increasing my equity allocation) during the next bear, and selling into the next bull. Doesn't seem that hard. Unless you're saying that no one can predict a bear market that is currently happening.

Incidentally, while I did buy on March 2, my much larger purchases were on October 8th after a weekly drop of 22% and with the S&P off 37% from it's high. The S&P would continue to fall by another 3rd. So no, I didn't catch the bottom perfectly but those October 8th prints are still crazy in the money.

Selling those shares now seems an easy call in comparison to buying them.

But that is the secret, isn't it? No one wants to buy stocks when they've dropped 22% in a single week. And no one wants to sell them after they've returned 17% annually over many years. But that's how I roll.
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Old 04-24-2016, 10:08 AM   #47
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I wonder what the sister is in since the index is only down about 5.2% from the peak and that doesn't include dividends.... with dividends I'm guessing it would be down only 3% or so. My diversified portfolio is only down about 1.5% from the peak so 11% is probably a misconception on her part or bad stock picking.



Besides the peak was less than a year ago. No risk... no reward.

She's all in index fund. The make up of the index fund is what I'm uncertain. For example, the TSP funds are all index funds but the I and S funds are still down, I think more than 10% if I recall. Only the C is now the same or near the same.


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Old 04-24-2016, 10:15 AM   #48
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Originally Posted by Gone4Good View Post
The fallacies here are three fold: 1) That people who hold cash today will hold cash forever; 2) That after a long bull market that has returned in excess of 200% from it's through that the return distribution of equities going forward is still somehow a random walk around it's historic mean and 3) that the people who bought equities in March 2009 (like me) still somehow need maximum equity risk even after earning ~17% compound annualized returns on equities for the last seven years.

So here's an analogy: you've won a ton of money at the roulette wheel when the manager comes and replaces the existing wheel with one that decreases your odds and potential payouts going forward. Do you keep playing on that wheel because "hey, nobody can predict the future" or do you cash in your chips and look for better odds somewhere or some-when else?

Exactly. I discover an old Newsweek or Times article in 2006 writing about the bull market that was 4 years long. That may explain why I was in CDs in 2007. Also while I didn't buy at the bottom in March 2009, I didn't lose half to start out with. And the stock market is not the only investments to make money and keep up with inflation. I bought a property in 2012 that has gone up 50% or more from the pile of cash that was earning less than 1%. There are more ways to skin a cat. So effectively my cash was double or more, returning 100%.


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Old 04-24-2016, 10:17 AM   #49
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Originally Posted by Gone4Good View Post
Regarding the fallacy that "no one can predict future market returns" we'll go back in time and recall this thread I started on March 7, 2009 a day or two from the ultimate market bottom . . .



The analysis is no different today. It's the conclusion that's different.

Yes, tell that to Joe Kennedy before 1929 crash.


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Old 04-24-2016, 10:24 AM   #50
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Originally Posted by Gone4Good View Post
I do plan on buying equities (increasing my equity allocation) during the next bear, and selling into the next bull. Doesn't seem that hard. Unless you're saying that no one can predict a bear market that is currently happening.

Incidentally, while I did buy on March 2, my much larger purchases were on October 8th after a weekly drop of 22% and with the S&P off 37% from it's high. The S&P would continue to fall by another 3rd. So no, I didn't catch the bottom perfectly but those October 8th prints are still crazy in the money.

Selling those shares now seems an easy call in comparison to buying them.

But that is the secret, isn't it? No one wants to buy stocks when they've dropped 22% in a single week. And no one wants to sell them after they've returned 17% annually over many years. But that's how I roll.

Nobody catches the bottom. Nobody sells at the top. It's delusional(not you) to think so but that doesn't mean one keeps following the mantra you can't time the market successful and dump 100% in the market, especially this is your retired retirement account. If you are still working then you can buy at the dip. But it's not the case for some of us retirees. No more new money.

I did buy at the top in 2008 for some small IRA money and they did recover nicely. But that's small amount, peanuts if you ask me. Maybe I should have the don't care attitude when it comes to stocks.


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Old 04-24-2016, 08:36 PM   #51
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