Young Investors & Returns in High Markets

[street]

So, I have another unintelligent question. With the young investors that have company payroll deduction for mutual/index funds how are they doing for growth?
With high markets the cost of stocks is higher than in low market times. So, buying high and market stays high, are they having much growth of wealth? I do know it is all relative for the long haul but for someone wanting to retire in a couple years down the road, what would be your view on that portfolio?

 

[37andhappy]

So, I have another unintelligent question. With the young investors that have company payroll deduction for mutual/index funds how are they doing for growth?
With high markets the cost of stocks is higher than in low market times. So, buying high and market stays high, are they having much growth of wealth? I do know it is all relative for the long haul but for someone wanting to retire in a couple years down the road, what would be your view on that portfolio?

Market will dip at some time. Maybe even over correct. So long as they are continuing to buy in over time, through the ups and downs, they should do fine in building wealth (at least based on historical data). Indeed, for a younger investor (*as referred to in the above post), they really should be hoping for a big correction early in their career to ensure they maximize value over their key earnings period. What you really don't want though is to be in your "prime" lets say 45, and then have 10 years of a downward market with a view to retiring at 55. But even then, I think averaging in would still be the way to go.

 

[street]

37andhappy, I do agree and yes over a long period of investing things will be fine for them historically.
I retired when market was down and was a good time to retire in my thinking. If the numbers worked out fine, in low market times you will be in good shape when the markets start going back up. In reverse not such a good thing.

 

[aja8888]

Depends, here many people feel the market will ALWAYS go up over time. And historically, that has been the case if you can ride out a down-spell.

But if we ever end up like Japan or some other countries where inflation went nuts and stayed nuts, anything can happen. Japan's market crashed about 20 years ago and has never come back.

 

[OverThinkMuch]

In the past 20 years, Japan's inflation high (2.7% and low -1.4%) don't look that wild to me.
https://tradingeconomics.com/japan/inflation-cpi
https://www.inflation.eu/en/inflation-rates/japan/historic-inflation/cpi-inflation-japan.aspx

I always thought Japan's refusal to write off bad debts caused zombie companies to haunt the economy. They have demographic challenges - maybe that's more significant now, and suggests a problem for the U.S. (and Europe).

 

[DrRoy]

Japan has also had a stagnant economy since the mid 1990's.

 

[HawkOwl]

So, I have another unintelligent question. With the young investors that have company payroll deduction for mutual/index funds how are they doing for growth?
With high markets the cost of stocks is higher than in low market times. So, buying high and market stays high, are they having much growth of wealth? I do know it is all relative for the long haul but for someone wanting to retire in a couple years down the road, what would be your view on that portfolio?

How many young investors really expect to retire “in a couple of years”?