What is the point of stocks?

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Pepper11
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What is the point of stocks?

Post by Pepper11 » Mon Mar 23, 2020 8:40 pm

Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.

jjface
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Re: What is the point of stocks?

Post by jjface » Mon Mar 23, 2020 8:44 pm

Stock markets go up over time. The economy and businesses grow.

Prior to 2017 the markets were lower than even now. Any investments before 2017 would still be gains even if you sold at today's depressed prices.
Last edited by jjface on Mon Mar 23, 2020 9:10 pm, edited 2 times in total.

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Noobvestor
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Re: What is the point of stocks?

Post by Noobvestor » Mon Mar 23, 2020 8:46 pm

Just quick-checked and it looks like US stocks have had annualized returns of around 6%/year over the past 20 years. The point of stocks is to own shares in income-producing companies, and build long-term wealth. A diversified portfolio of stocks/bonds has delivered on that for a long time. If you're finding stocks frustrating right now, consider a Target Date fund so you can tune out the noise, and/or do some backtesting.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

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nps
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Re: What is the point of stocks?

Post by nps » Mon Mar 23, 2020 8:47 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD.
That is certainly not true.

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arcticpineapplecorp.
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Re: What is the point of stocks?

Post by arcticpineapplecorp. » Mon Mar 23, 2020 8:47 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
how do you figure?

"In the last 20 years?" What starting point are you talking about exactly?

Since you didn't say, can we start at 20 years ago?

If so, you would have earned 130%. I think that would have earned more than 1% per year. I understand you're saying earning 1% per year now is better than losing 30%, but that's a one year return. And the year's not anywhere near being over. Even in 1987 when stocks fell 23% in Oct, you'd have made 2% if you held the entire year in 1987...and that had very good returns the following year (16.22% to be exact in 1988. source: http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D)

You can see how 20 years (and longer) compounding interest works wonders. Or at least I hope you now do. By the way, even 20 years is a blip in a lifetime of investing. If you start in your 20s and retire in your 60s, that's 40 years of contributions. Do you sell all stocks the day you retire? Most don't. They may go conservative, but much evidence suggests holding at a minimum 30% in stocks in and through retirement to avoid longevity and inflation risk. If you retire in your 60s but live into your 90s, that's holding a part of your money in stocks (anywhere from 30% to 100%) for 70 years. Now do you see how 20 years is a sprint and you should focus on the marathon?

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source: http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D
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watchnerd
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Re: What is the point of stocks?

Post by watchnerd » Mon Mar 23, 2020 8:53 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
Stocks build character.

Makes you emotionally resilient.

:beer
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MathWizard
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Re: What is the point of stocks?

Post by MathWizard » Mon Mar 23, 2020 8:57 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
VTSAX has provided a 2% dividend every year I can remember.

jpmorganfunds
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Re: What is the point of stocks?

Post by jpmorganfunds » Mon Mar 23, 2020 8:58 pm

Buying an index is lower risk, lower return than individual stocks. If you want higher risk, higher return buy individual stocks.

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1789
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Re: What is the point of stocks?

Post by 1789 » Mon Mar 23, 2020 9:29 pm

watchnerd wrote:
Mon Mar 23, 2020 8:53 pm
Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
Stocks build character.

Makes you emotionally resilient.

:beer
Nice one. One needs to learn losing in order to learn how to win.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)

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firebirdparts
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Re: What is the point of stocks?

Post by firebirdparts » Mon Mar 23, 2020 9:42 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
I think the confusion springs from an issue that you are very, very bad at math. However, there is a way to lose all your money in the stock market, for sure. It's an option. So the range of outcomes extends from total ruin all the way up to you get rich. There is some uncertainty involved.

In addition, the philosophy around investing has been deliberately confused by a lot of smokescreens and liars, because frankly, there's money involved. If you listen to the liars, it might not make a whole lot of sense what is going on.
Last edited by firebirdparts on Mon Mar 23, 2020 9:45 pm, edited 1 time in total.
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Re: What is the point of stocks?

Post by MotoTrojan » Mon Mar 23, 2020 9:44 pm

Comparison of t-bills (CASHX) to 100% S&P500 from February 2000 to February 2020: https://www.portfoliovisualizer.com/bac ... ion2_2=100

Honestly a bit surprised that it only doubled your money. TWRR of 1.65% so this is a bit more than a 1% CD but not far off.

Results are even worse when you include the drawdown of March 2020.

mega317
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Re: What is the point of stocks?

Post by mega317 » Mon Mar 23, 2020 9:44 pm

Stocks were created by ladygeek as a gimmick to increase traffic.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

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StormShadow
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Re: What is the point of stocks?

Post by StormShadow » Mon Mar 23, 2020 9:59 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
Oh Geez, hyperbole much? Talk about a strange case of cherry picking.

I started investing about 20 years ago. I sure as heck have done better than 1% per year.

Look, stocks carry risk. Stocks are volatile. But OVER TIME you get rewarded with returns that will easily beat out inflation.

In any event, I do believe that stocks aren’t for everyone. I’ve said this many times before. If you can’t handle the swings in the market (and there are ALWAYS going to be swings), don’t invest in them. Because you will be constantly tempted into making unwise decisions with stocks when the market goes up or down.

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Re: What is the point of stocks?

Post by bobcat2 » Mon Mar 23, 2020 10:06 pm

Noobvestor wrote:
Mon Mar 23, 2020 8:46 pm
Just quick-checked and it looks like US stocks have had annualized returns of around 6%/year over the past 20 years. The point of stocks is to own shares in income-producing companies, and build long-term wealth. A diversified portfolio of stocks/bonds has delivered on that for a long time. If you're finding stocks frustrating right now, consider a Target Date fund so you can tune out the noise, and/or do some backtesting.
Your quick check of US stock returns is incorrect. Since 12/31/1999 the real annual return on the Wilshire 5000 Total US Stock Index with dividends reinvested is about 2.2%. The annual real return on LT US Treasuries over the same time period is about 5%.

Here are the Wilshire values through the end of last year.
12/31/1999 44.67
12/31/2019 153.50
nominal annual return 6.366%


Here are the CPI values.
12/1999 168.800
12/2019 258.444
annual inflation rate 2.153%

real return = (.06366-.02153)/1.02153=.04213/1.02153=.041=4.1%

So the real return for the US Stock Market with dividends reinvested over exactly the first 20 years of this century (thru 12/31/2019) was 4.1%.

The latest data point at FRED for the Wilshire is last Friday's value (3/20/20) of the Wilshire Index at 108.24, a sharp drop from the 12/31 value of 153.50. The Wilshire was down today about 2.8% so I am estimating today's value to be 106.00, although that is probably a little high. That puts the real annual return on the stock market since the end of 1999 at about 2.2%.

BobK
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tarmangani
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Re: What is the point of stocks?

Post by tarmangani » Mon Mar 23, 2020 10:07 pm

Others have already critiqued your math, so I'll come at this from another angle: the point of investing in equities is to follow Bogle's dictum, "Invest we must." That is, if you want to retire. Absent solvent and attractive pensions, which describes virtually everyone today, you have no choice but to invest in equities and hope for the best. Otherwise you will be eaten by inflation, as in your 1% CD example, and struggle to ever retire. That, IMO, is the point.

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Re: What is the point of stocks?

Post by watchnerd » Mon Mar 23, 2020 10:12 pm

tarmangani wrote:
Mon Mar 23, 2020 10:07 pm
Others have already critiqued your math, so I'll come at this from another angle: the point of investing in equities is to follow Bogle's dictum, "Invest we must." That is, if you want to retire. Absent solvent and attractive pensions, which describes virtually everyone today, you have no choice but to invest in equities and hope for the best. Otherwise you will be eaten by inflation, as in your 1% CD example, and struggle to ever retire. That, IMO, is the point.
Well...if the only goal is to stay ahead of inflation, why not TIPS?
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Pepper11
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Re: What is the point of stocks?

Post by Pepper11 » Mon Mar 23, 2020 10:18 pm

The overwhelming majority of people under 50 would have been much better off to be 0% stock over the last 20 years, despite the nice platitudes of stocks always going up over the long term. That is a fact.

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watchnerd
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Re: What is the point of stocks?

Post by watchnerd » Mon Mar 23, 2020 10:19 pm

[Math aside....these kind of "why stocks" posts are one of my leading indicators for approaching the bottom...]
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InvestingGeek
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Re: What is the point of stocks?

Post by InvestingGeek » Mon Mar 23, 2020 10:21 pm

Some actual data to back up these ridiculous assertions would be nice, OP. Otherwise, best ignored as trolling.

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Re: What is the point of stocks?

Post by vipertom1970 » Mon Mar 23, 2020 10:22 pm

feed the troll !!!

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9-5 Suited
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Re: What is the point of stocks?

Post by 9-5 Suited » Mon Mar 23, 2020 10:25 pm

watchnerd wrote:
Mon Mar 23, 2020 10:19 pm
[Math aside....these kind of "why stocks" posts are one of my leading indicators for approaching the bottom...]
In retrospect and as a corollary, I probably should have paid more attention to all the “why not 100% stocks?” threads over the past 6 months :)

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Pepper11
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Re: What is the point of stocks?

Post by Pepper11 » Mon Mar 23, 2020 10:27 pm

I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.

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Re: What is the point of stocks?

Post by gwrvmd » Mon Mar 23, 2020 10:28 pm

I retired at the end of 2005. From Jan 2006 to Mar 2020, the assets in my IRA tripled. And I didn't add anything, I'm retired,no earned income.
As of today 3/23/20, the value of my IRA is still double what it was when I retired. I'm sure glad I didn't put it in a 1% CD
Disciple of John Neff

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Re: What is the point of stocks?

Post by MathIsMyWayr » Mon Mar 23, 2020 10:29 pm

bobcat2 wrote:
Mon Mar 23, 2020 10:06 pm
So the real return for the US Stock Market with dividends reinvested over exactly the first 20 years of this century (thru 12/31/2019) was 4.1%.

The latest data point at FRED for the Wilshire is last Friday's value (3/20/20) of the Wilshire Index at 108.24, a sharp drop from the 12/31 value of 153.50. The Wilshire was down today about 2.8% so I am estimating today's value to be 106.00, although that is probably a little high. That puts the real annual return on the stock market since the end of 1999 at about 2.2%.

BobK
With 20% more drop, the real annual return will be 2.1%. Quite depressing.

InvestingGeek
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Re: What is the point of stocks?

Post by InvestingGeek » Mon Mar 23, 2020 10:31 pm

I have an annual return of 8.6% over the last ten years even after the latest drop. The amount I have invested has doubled over this period.

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Re: What is the point of stocks?

Post by watchnerd » Mon Mar 23, 2020 10:32 pm

9-5 Suited wrote:
Mon Mar 23, 2020 10:25 pm
watchnerd wrote:
Mon Mar 23, 2020 10:19 pm
[Math aside....these kind of "why stocks" posts are one of my leading indicators for approaching the bottom...]
In retrospect and as a corollary, I probably should have paid more attention to all the “why not 100% stocks?” threads over the past 6 months :)
That, too!
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watchnerd
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Re: What is the point of stocks?

Post by watchnerd » Mon Mar 23, 2020 10:35 pm

InvestingGeek wrote:
Mon Mar 23, 2020 10:31 pm
I have an annual return of 8.6% over the last ten years even after the latest drop. The amount I have invested has doubled over this period.
The last 10 years have been freakishly good.

My returns aren't even close to that good* over my index investing life, having been invested in any meaningful way since about 2001.

Luckily, I save buckets of ducats.

(*except for my ESPP and RSU, which have earned >80% in the last 3 years and make up for it all. and VC investments)
Last edited by watchnerd on Mon Mar 23, 2020 10:38 pm, edited 2 times in total.
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Re: What is the point of stocks?

Post by firebirdparts » Mon Mar 23, 2020 10:37 pm

I will just mention here, additionally, that we had significant problems in 2019 with people trying to understand the 10 year and 20 year returns. 1999 was an extraordinary, outrageous year in terms of high Nasdaq stock valuations. I don't expect ever to see that again. 2009 was a pretty low year. Not nearly as extraordinary as 1999, but still, people were afraid the great depression was coming back.

So people would accidentally make these really ridiculous endpoint selections, and since it was an accident you couldn't explain it to them. It's 2020 now, so it's less ridiculous, but it'll be a while before we get totally away from the "problem."
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Re: What is the point of stocks?

Post by Independent George » Mon Mar 23, 2020 10:42 pm

Pepper11 wrote:
Mon Mar 23, 2020 10:27 pm
I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.
Turned 43 last month. My 401k has returned a cumulative 7.86% return since 2004 (when I vested). I'm not sure what my Roth IRA has returned since 2002 (Vanguard doesn't list the annualized return past 10 years), but I have to imagine it's in the same neighborhood. And 40% of my stocks are in international, which have underperformed dramatically over this same period.

Seriously, how in the world are you calculating a cumulative return below 1%?

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Re: What is the point of stocks?

Post by watchnerd » Mon Mar 23, 2020 10:46 pm

Independent George wrote:
Mon Mar 23, 2020 10:42 pm
Pepper11 wrote:
Mon Mar 23, 2020 10:27 pm
I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.
Turned 43 last month. My 401k has returned a cumulative 7.86% return since 2004 (when I vested). I'm not sure what my Roth IRA has returned since 2002 (Vanguard doesn't list the annualized return past 10 years), but I have to imagine it's in the same neighborhood. And 40% of my stocks are in international, which have underperformed dramatically over this same period.

Seriously, how in the world are you calculating a cumulative return below 1%?
Maybe not including dividends?

Although I don't think that would explain it.
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Re: What is the point of stocks?

Post by InvestingGeek » Mon Mar 23, 2020 10:47 pm

Independent George wrote:
Mon Mar 23, 2020 10:42 pm
Pepper11 wrote:
Mon Mar 23, 2020 10:27 pm
I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.
Turned 43 last month. My 401k has returned a cumulative 7.86% return since 2004 (when I vested). I'm not sure what my Roth IRA has returned since 2002 (Vanguard doesn't list the annualized return past 10 years), but I have to imagine it's in the same neighborhood. And 40% of my stocks are in international, which have underperformed dramatically over this same period.

Seriously, how in the world are you calculating a cumulative return below 1%?
I doubt there's any data here. It's just trying to get a rise out of the forum aka trolling. The dividends alone easily beat that CD.

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Re: What is the point of stocks?

Post by Independent George » Mon Mar 23, 2020 10:47 pm

watchnerd wrote:
Mon Mar 23, 2020 10:46 pm
Maybe not including dividends?

Although I don't think that would explain it.
Maybe he invested a lump sum right before the dot com crash, and never added another dollar since then?

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Re: What is the point of stocks?

Post by H-Town » Mon Mar 23, 2020 10:55 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
:mrgreen: I laughed out loud. Hilarious!

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Re: What is the point of stocks?

Post by DonIce » Mon Mar 23, 2020 10:56 pm

Well, 1% CD aside, one would have gotten better and much less volatile returns just investing in intermediate term treasuries20 years ago than stocks (once the graph updates for March it'll show the stock returns ending lower):

https://www.portfoliovisualizer.com/bac ... ion2_2=100

But of course if one contributed on a regular basis, one would have done better with stocks.
Last edited by DonIce on Mon Mar 23, 2020 10:57 pm, edited 1 time in total.

mega317
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Re: What is the point of stocks?

Post by mega317 » Mon Mar 23, 2020 10:57 pm

9-5 Suited wrote:
Mon Mar 23, 2020 10:25 pm
watchnerd wrote:
Mon Mar 23, 2020 10:19 pm
[Math aside....these kind of "why stocks" posts are one of my leading indicators for approaching the bottom...]
In retrospect and as a corollary, I probably should have paid more attention to all the “why not 100% stocks?” threads over the past 6 months :)
Yeah but now we're just getting the threads asking if you should increase your allocation, buy stocks on sale, etc.
https://www.bogleheads.org/forum/viewtopic.php?t=6212

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Re: What is the point of stocks?

Post by MathWizard » Mon Mar 23, 2020 10:59 pm

Google portfolio visualizer

You can use that to backtest various asset allocations from 2000 to 2020.

Starting with 1,000 and contributing that much every month means you have put in $240K, 20 years at 12K per year. Put that in and see what you end up with, assuming you rebalance once a year .
Pick an allocation of stocks and bonds, and I think you end up with more than double that, no matter what percentages that you choose.

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Re: What is the point of stocks?

Post by Independent George » Mon Mar 23, 2020 11:03 pm

InvestingGeek wrote:
Mon Mar 23, 2020 10:47 pm
I doubt there's any data here. It's just trying to get a rise out of the forum aka trolling. The dividends alone easily beat that CD.
Account was created in 2014. Who joins a forum for six years then decides to become a troll?

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Re: What is the point of stocks?

Post by watchnerd » Mon Mar 23, 2020 11:10 pm

Independent George wrote:
Mon Mar 23, 2020 11:03 pm
InvestingGeek wrote:
Mon Mar 23, 2020 10:47 pm
I doubt there's any data here. It's just trying to get a rise out of the forum aka trolling. The dividends alone easily beat that CD.
Account was created in 2014. Who joins a forum for six years then decides to become a troll?
Somebody who finally just looked at their statement for the first time in 6 years?
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srt7
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Re: What is the point of stocks?

Post by srt7 » Mon Mar 23, 2020 11:22 pm

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
Why didn't you ask this question in January 2020?
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Re: What is the point of stocks?

Post by Brokepilot » Tue Mar 24, 2020 12:50 am

I am going to feed the troll here.

I started saving when I went to OCS and for past five years I have saved every dime to max my TSP, my Vanguard Roth and put some into a taxable account. I also rent(ed) my first home out when I PCS'd to my current duty station.

Where do I stand currently? Well my accounts combined currently sit at $116,000 and out of that I invested $131,500. My tenants are moving out next week and because no one can PCS's during to the COVID-19 breakout, I cant find a new tenant nor sell my house. I have about 5 months of reserve that I can pay the mortgage before I will have a major problem. However, that outside the scope of this rant.
2019 Status: | Military Pilot. | Two mortgages, one a rental. | Maxing out the TSP and trying to max out Vanguard Roth.

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Re: What is the point of stocks?

Post by Noobvestor » Tue Mar 24, 2020 12:57 am

bobcat2 wrote:
Mon Mar 23, 2020 10:06 pm
Noobvestor wrote:
Mon Mar 23, 2020 8:46 pm
Just quick-checked and it looks like US stocks have had annualized returns of around 6%/year over the past 20 years. The point of stocks is to own shares in income-producing companies, and build long-term wealth. A diversified portfolio of stocks/bonds has delivered on that for a long time. If you're finding stocks frustrating right now, consider a Target Date fund so you can tune out the noise, and/or do some backtesting.
Your quick check of US stock returns is incorrect. Since 12/31/1999 the real annual return on the Wilshire 5000 Total US Stock Index with dividends reinvested is about 2.2%. The annual real return on LT US Treasuries over the same time period is about 5%.

Here are the Wilshire values through the end of last year.
12/31/1999 44.67
12/31/2019 153.50
nominal annual return 6.366%


Here are the CPI values.
12/1999 168.800
12/2019 258.444
annual inflation rate 2.153%

real return = (.06366-.02153)/1.02153=.04213/1.02153=.041=4.1%

So the real return for the US Stock Market with dividends reinvested over exactly the first 20 years of this century (thru 12/31/2019) was 4.1%.

The latest data point at FRED for the Wilshire is last Friday's value (3/20/20) of the Wilshire Index at 108.24, a sharp drop from the 12/31 value of 153.50. The Wilshire was down today about 2.8% so I am estimating today's value to be 106.00, although that is probably a little high. That puts the real annual return on the stock market since the end of 1999 at about 2.2%.

BobK
So I typed 'about 6%' and you said I was incorrect, did a lot of math and came up with ... 6.6%, minus a bit. I'd say I was in the ballpark. :)

Anyway, I was just pointing out that the last 20 years stocks > 1%/year CDs, real or nominal.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

Ari
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Re: What is the point of stocks?

Post by Ari » Tue Mar 24, 2020 4:46 am

Pepper11 wrote:
Mon Mar 23, 2020 10:27 pm
I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.
I'm 36, started investing about six years ago, I'm 100% stocks and my broker tells me I'm still in the black. I'm only 20% US stocks, too, so I've been largely invested in the terrible "international" markets (US is international, too, though, for me).
All in, all the time.

johan_s
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Re: What is the point of stocks?

Post by johan_s » Tue Mar 24, 2020 4:53 am

Base of most soup recipes. More flavorful substitute for water?

onourway
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Re: What is the point of stocks?

Post by onourway » Tue Mar 24, 2020 4:58 am

Pepper11 wrote:
Mon Mar 23, 2020 10:27 pm
I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.
Show your work.

averagedude
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Re: What is the point of stocks?

Post by averagedude » Tue Mar 24, 2020 4:58 am

When future retirees look back on the stock investments that they made in their lifetimes, they will look back at the period of 2000-2010 and realize that this is where they made most of their money.

restingonmylaurels
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Re: What is the point of stocks?

Post by restingonmylaurels » Tue Mar 24, 2020 5:15 am

Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
I was reading an article on an auspicious date exactly 20 years ago when I saw this thread.

20 years ago, March 24, 2000, was the market high point before the bursting of the Internet bubble.

In the 20 years since, bonds, both long and intermediate treasuries, have outpaced the S&P500 on annualized return, through March 20, 2020.

So OP may have a point. Here is the link: https://www.marketwatch.com/story/today ... latestnews

onourway
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Re: What is the point of stocks?

Post by onourway » Tue Mar 24, 2020 5:45 am

restingonmylaurels wrote:
Tue Mar 24, 2020 5:15 am
Pepper11 wrote:
Mon Mar 23, 2020 8:40 pm
Seriously. What is the point of investing in passive index stocks? Basically every single person who started investing in the last 20 years, so basically everyone under 50 on this forum, would have been better off today if they just put money in a 1% CD. I sure hope there are some out there that have picked some good stocks and done well, because this passive index fund investing in VTI seems to get you nowhere except the ability to tax loss harvest.
I was reading an article on an auspicious date exactly 20 years ago when I saw this thread.

20 years ago, March 24, 2000, was the market high point before the bursting of the Internet bubble.

In the 20 years since, bonds, both long and intermediate treasuries, have outpaced the S&P500 on annualized return, through March 20, 2020.

So OP may have a point. Here is the link: https://www.marketwatch.com/story/today ... latestnews
Even cherry picking two auspicious dates stocks are still ahead.

And I certainly did not lump sum invest in March of 2000.

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climber2020
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Re: What is the point of stocks?

Post by climber2020 » Tue Mar 24, 2020 5:54 am

Pepper11 wrote:
Mon Mar 23, 2020 10:27 pm
I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.
I started investing around 2011 and my personal performance chart of my taxable account (which is 100% stocks) shows I'm still positive, by way more than 1%. Did you include dividend reinvestments in your calculations? Those make a difference.

My tax protected accounts, which are mostly bonds, have been doing fine with not much change over the last several months. They've been a nice ballast during this volatile period.

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ofcmetz
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Re: What is the point of stocks?

Post by ofcmetz » Tue Mar 24, 2020 7:35 am

onourway wrote:
Tue Mar 24, 2020 4:58 am
Pepper11 wrote:
Mon Mar 23, 2020 10:27 pm
I am not trolling. If you are under 50 and you do not have a negative cumulative return, please post on this tread to give us hope. I will be shocked if anyone does.
Show your work.
Just because you say you aren’t trolling doesn’t mean it isn’true.
Never underestimate the power of the force of low cost index funds.

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tvubpwcisla
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Re: What is the point of stocks?

Post by tvubpwcisla » Tue Mar 24, 2020 7:40 am

You should read this story to answer your question, "What is the point of stocks?"

https://www.cnbc.com/2016/08/29/janitor ... rtune.html

:sharebeer
The secret to building wealth is to have a plan, keep expenses low, become an expert in your craft, consistently buy the market, diversify, establish multiple income streams, and always smile.

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