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Was this suppose to be a response to me? I hope not....it doesn't address anything I stated.
it sure was! you make blanket statements about the markets poor returns over the decade and thats not true as a blanket statement. ... depending what you owned and if you rebalanced and if you bought or continued to contribute to your 401k or investment plan for the last 3 years instead of hiding under a rock you had a good decade investing. in fact for those over the age of 55 who contributed the max into their retirement plans at fidelity over the last decade saw the average balance grow from 96,000 to 213,000 ..2/3 were contributions and employer matching and 1/3 were gains. overall even those gains were small compared to portfolios that contain true diversification. investing is far more then just equities. the key is dont time things, i repeat dont try to time things. you cant do it.. buy your asset classes ,re-balance ,buy more when things drop if you got extra dough and enjoy your life.
even looking at fidelity's stock funds for the decade they ranged from 2.31% a year cagr for the s&p index fund to 12% a year cagr for leveraged company stock fund. most other stock funds came in somewhere inbetween with the median around 5-6 % annual cagr and we are talking no rebalancing , no diversification and no adding additional funds just buy and hold. returns were much higher when the above was done.
Last edited by mathjak107; 02-01-2011 at 04:27 PM..
it sure was! you make blanket statements about the markets poor returns over the decade and thats not true as a blanket statement. ...
I made a statement about stock market as a whole and its wholly supported by the data, over the last decade equities have been weak.
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Originally Posted by mathjak107
in fact for those over the age of 55 who contributed the max into their retirement plans at fidelity over the last decade saw the average balance grow from 96,000 to 213,000 ..2/3 were contributions and employer matching and 1/3 were gains.
Was this suppose to refute me? That represents an annual return of around 3.2%.
Anyhow, you're still not responding to what was stated. Claiming that equities will be weak for a decade is not inconsistent with short term volatility. Furthermore, you are counting your chickens before they hatch, but you like to do that a lot.
and you like to shoot from the hip... unless you bought an s&p index fund and nothing else and added no money to it it and didnt rebalnce then you got 2.3%.... the proof is in the pudding. go to fidelitys site, look at the returns for the decade on their stock funds. they are way more then 2.3% if you didnt buy an s&p index fund. even if you did as long as you had a well balanced portfolio you still got a decent return. i use VTI ,its vanguards total market fund but its dominated mostly by the s&p 500.. coupled with bonds and some gold still returned over 9%.
you remind me of those people who have all kinds of opinions about how to raise kids but they have no children. you come out with all kinds of statements about the markets but you arent even an investor in them . your facts are short sighted and for the most part not correct.
rebalancing and adding more money thru the decade increased those fidelity fund returns even farther and most of those equity funds had good returns for the decade even if you didnt .
but anyway i suggest you go look at the 10 year returns ending 12/31/2010 for the non index funds.
why the non index funds? because the index funds were poor performers from the standpoint many of the large companies that failed were in the indexes and they were forced to hold them . regular managed funds may not have held them and so market performance was far better then the indexes show. thats why most funds show they did on average 3x better then the indexes in the large cap area. mid caps were up about 50% on the decade in their indexes and those managed funds did better then that. . today as an example the nasdaq index fund QQQQ holds google and apple. it works out they are so heavily weighted in the index that they account for 29% of the index. if anything happened to to them the index would plunge. but if your actively managed fund didnt own those 2 you would have done way better.
we dont know what the future holds but once again im willing to bet those with a good investment plan will be rewarded for sticking to it.
Last edited by mathjak107; 02-02-2011 at 03:03 AM..
could you argue that the s&p500 index is one of the most widely followed and owned indexes and it had shoddy performance for the decade? sure you could. but buying that and only that isnt an investment plan.
its like when i first started jogging i wasnt loosing weight. i was running 5 miles every other day but no one told me the running would only make me eat more. well i lost no weight until i learned i have to couple the running with restricting my calorie intake and weight training. BINGO ,now i had a plan... by its self running was only 1 component of the plan. calorie restricting and weight training were the other parts.
making a statement that running doesnt make you loose weight maybe true,but its not a complete truth. running will make you loose weight when coupled with a plan and strategy ..
and you like to shoot from the hip... unless you bought an s&p index fund and nothing else and added no money to it it and didnt rebalnce then you got 2.3%.... [
You quoted a comment about equities, hence discussion is about equities, how well a balanced portfolio with other asset classes does is irrelevant.
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Originally Posted by mathjak107
you remind me of those people who have all kinds of opinions about how to raise kids but they have no children. you come out with all kinds of statements about the markets but you arent even an investor in them .
And you can't keep on topic. I've been investing on and off since I was a teenager. I don't invest much in equities, that much is true. But I don't invest much in them because I believe they are overvalued.
I have no interest in balanced portfolios and other "set it and forget it" investment strategies. I invest when I see value or an opportunity to ride a wave, if I see no good opportunities I'm not going to invest.
Regardless, the topic was equities and how they are going to do in the future.
Fellas, why is the market in rally mode?? ADP payrolls not good, Egypt is out of control, inflation etc., is something big coming? LMAO. I wonder if they are swelling it for some big boys to get out in time.
I just liquidated half of my portfolio with today's rally. Appreciable profit and I'll wait for the next down day.
so far corporate profits and revenues have been very good . so far we are on track for record corporate profits on the s&p 500 of over 95.00 a share eclipsing 2007's record of 86.00 or so.
in the beginning it was all about cost cutting but that shifted last year when revenues rose.
historically cheap money, cheap labor and low inflation are also positives.
we also have the fear of that double dip behind us as that fear diminished. things aint great dont get me wrong , but they are still a whole lot less bad. typically with profits doing as well as they have the markets should be soaring but the fact of the worlds financial grief, the housing market and unemployment are factoring themselves in and tempering things.
you also have the fed back stopping stocks. with qe2 pumping up the markets and hurting bonds there is a ton of money that can make a potential move back to equities actually creating a melt up.
the amount of money that flowed into bonds in just the last 2 years is more then all the money that flowed in equities at the height of the dot coms. 2/3 of a trillion dollars made a move over the last 2 years..
if qe2 doesnt do the trick there could be qe3 further hurting bonds driving even more money into equities...
nothing is written in stone but this is all current thinking . we dont know what will be but no matter what a good investment portfolio and strategy works across a full market cycle. it balances risk and rewards so you dont have to worry about riding the next wave and timing it to get out in time while timing the next wave elsewhere. it just aint happening .....
Last edited by mathjak107; 02-02-2011 at 04:05 PM..
so far corporate profits and revenues have been very good . so far we are on track for record corporate profits on the s&p 500 of over 95.00 a share eclipsing 2007's record of 86.00 or so.
Yesterdays corporate profits don't mean anything.
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Originally Posted by mathjak107
historically cheap money, cheap labor and low inflation are also positives
None of these represent positive things...
Quote:
Originally Posted by mathjak107
you also have the fed back stopping stocks. with qe2 pumping up the markets and hurting bonds there is a ton of money that can make a potential move back to equities actually creating a melt up.
So equities are strong because the FED is pumping them up? Hmm......
Anyhow, I have no idea how long the current rally is going to last. I'm not buying into it because I don't know what is driving it and hence can't predict when its going reverse. I also don't have the time for trading right now, there are a few companies I may buy but my horizon is years.
todays outlook for profits is forecasted to look better going forward, that is whats driving it..... its all forecasted by the companies who give guidance to the analysts .
cheap labor, low inflation and cheap money arent positives for profits? really?
as far as the fed back stopping the markets? its all a combination of the above and whats important is the markets like the combo..
how long will the ralley last? as the great peter lynch said : dont know, dont care" but what if things unwind? well thats where good portfilio design steps in... if things fall i rebalance,buy more and get ready for the next wave. each time we get higher highs and higher lows typically . we may get an aberation every so ofton like 2 back to back recessions in one decade but even then so what, a good strategy still turns a profit more ofton then not.
dont have the long time horizon? then the markets may not be right for you. or be a speculator and try to beat the markets at their own game and good luck long term doing that..
Last edited by mathjak107; 02-02-2011 at 04:26 PM..
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