Will I ever have more than I put in?

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dayzero
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Will I ever have more than I put in?

Post by dayzero » Sun Mar 01, 2009 11:30 am

March 1st. Monthly portfolio checkup and contribution/rebalancing time. Another brutal month.
That is all.

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deepdrive
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Re: Will I ever have more than I put in?

Post by deepdrive » Sun Mar 01, 2009 11:36 am

mike_slc wrote:March 1st. Monthly portfolio checkup and contribution/rebalancing time. Another brutal month.
That is all.
Maybe cut your contributions in half.
Investment difficulty and long-term success are perfectly negatively correlated. Keep it simple.

YDNAL
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Re: Will I ever have more than I put in?

Post by YDNAL » Sun Mar 01, 2009 11:40 am

Mike,

WB's decline represents a significant piece of the $10,900,000,000 in 4Q2008 decline in Berkshire's net worth. Don't feel too bad. :)
Reuters wrote: Warren Buffett's insurance and investment company, barely broke even in the fourth quarter because of losses on derivatives contracts tied to the stock market.

Profit fell 96 percent, the fifth straight quarterly decline, and Berkshire's net worth tumbled $10.9 billion in the year's final three months.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

atomiclightbulb
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Post by atomiclightbulb » Sun Mar 01, 2009 11:45 am

I started investing about ten years ago. The money I invested in stock index funds is now worth less today than it was in 1999. I bought and held, and now I am paying the price for the excesses of Wall Street and the corruption of Washington D.C.

If I had left the money in a CD or bonds I would have done much better.

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Adrian Nenu
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Post by Adrian Nenu » Sun Mar 01, 2009 11:54 am

March 1st. Monthly portfolio checkup and contribution/rebalancing time. Another brutal month
- if you want steadier returns, invest in bonds and CDs mostly. Stocks are much riskier and volatile.

Adrian
anenu@tampabay.rr.com

Topic Author
dayzero
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Post by dayzero » Sun Mar 01, 2009 12:06 pm

Adrian Nenu wrote:
March 1st. Monthly portfolio checkup and contribution/rebalancing time. Another brutal month
- if you want steadier returns, invest in bonds and CDs mostly. Stocks are much riskier and volatile.

Adrian
anenu@tampabay.rr.com
No plans to change anything. Still diligently contributing and rebalancing. Just venting.

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deepdrive
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Re: Will I ever have more than I put in?

Post by deepdrive » Sun Mar 01, 2009 12:18 pm

Bob_H wrote:
Maybe cut your contributions in half and start enjoying the hookers and blow again.[/quote]


Did you get Sox tix yet?[/quote]

I have tickets to three games so far. I usually go to about ten games a year. I buy upper deck seats, and use the teacher's coupons for 1/2 off for three games. So it's affordable. Parking at $22 a pop sucks, though. But it's great when you got a group of five in the car.

Looking forward to the MLB season!
Investment difficulty and long-term success are perfectly negatively correlated. Keep it simple.

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Re: Will I ever have more than I put in?

Post by YDNAL » Sun Mar 01, 2009 12:59 pm

deepdrive wrote:Looking forward to the MLB season!
Look out for the young Marlins. Oh, NO!... does that count as a prediction a la Matt (sorry, dude!)? :)

No one has commented on WB's (mis)fortunes in 2008.
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

tj218
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Post by tj218 » Sun Mar 01, 2009 1:09 pm

"He gone"

Clearly the worst announcer in MLB.


Looking forward to see the Indians beat the White Sox again.

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dayzero
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Re: Will I ever have more than I put in?

Post by dayzero » Sun Mar 01, 2009 1:34 pm

YDNAL wrote:No one has commented on WB's (mis)fortunes in 2008.
I bet he still has more than he put in. :wink:

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nisiprius
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Post by nisiprius » Sun Mar 01, 2009 9:04 pm

"Will I ever have more than I put in?" Very likely yes, provided you're prepared to wait a couple of decades. It won't necessarily take that long, but it certainly could.

If you'd invested in the stock market at the end of 1928, held, reinvested dividends, then, corrected for inflation, despite the staggering losses of the first few years, end-of-1942 is the year that your portfolio would have reached and remained above its initial value.

From that point on, your average annual real rate of return for the whole period would have climbed fairly steadily, reaching 5% real in 1954.

In other words, if you'd planned on a 5% real rate of return, you'd have made up your losses in 14 years and achieved your planned rate of return 26.

I haven't worked them through in detail, but the statistics are roughly similar for an investment made in 1965. People tend to ignore how lousy the period from 1965 to 1982 was--zero real return--because there was no dramatic crash.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

kayman
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Post by kayman » Sun Mar 01, 2009 11:40 pm

I've been investing for around 8 years now, and I have less money than I've put in over these years. It's pretty depressing knowing that, for what is likely to be a decade, a coffee can would beat my returns. In fact, right now Vanguard lists my 5 year returns at -50.9%. Ouch.

TranceLordSnyder
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Post by TranceLordSnyder » Mon Mar 02, 2009 12:17 am

kayman wrote:I've been investing for around 8 years now, and I have less money than I've put in over these years. It's pretty depressing knowing that, for what is likely to be a decade, a coffee can would beat my returns. In fact, right now Vanguard lists my 5 year returns at -50.9%. Ouch.
I guess I feel better at only being down 20% on my investments over the last 6 months. Ok, not really. It is sad that a coffee can would have been better than investing. I bought a book, and spent my time reading to lose money. Worst investment EVER. Ok, I won't know that until years later. haha Oh well. I just hope the world does some kind of turn around and things pick up over the next few decades.

biasion
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Post by biasion » Mon Mar 02, 2009 9:24 am

What the investments are worth is immaterial. Who cares if you invested X and now have Y. What really counts is what you have in terms of real return, you know, the kind you get after you pay fees after taxes and inflation.

I have been really thinking about it. To get a real return that beats inflation, which is always understated, and taxes, particularly from a taxable account, requires you earn returns of at least high single digits. That requires a lot of principal risk, and it means a lot of the time you could be ending up with less money than you put in for a very long time.

That's the real risk of delaying consumption. It's easy to say, well, the return was X, and if you held on for so many years, then you got that return. But, when you factor the loss of purchasing power that inflation eats at your savings, even before you factor the tax drag it undergoes it becomes depressing to see how little you get for deferring consumption.

Not counting what the future may bring, and if income redistribution will be performed in favor of those who turned their house upside down to go to Disney world, a Porsche or something fun sounds like one of the best possible investments you can make right now.

Partly it's because I truly love my job and that alone is part of a huge payoff that has nothing to do with money, part of it is because the Human Capital is also the best hedge against loss of purchasing power of your existing investments. Maybe planning to retire as late as possible, or not at all isn't a bad idea given the kind of risk you need to take just to have a chance (without guarantees) at increasing your purchasing power at least at some points over time.

newbogleuser
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Post by newbogleuser » Mon Mar 02, 2009 9:28 am

This is why I have stop-loss orders.

Bogle can tout index funds all they want; but the individual stocks that I picked for my Roth IRA are doing much better than the overall market.

I moved my 401k to PTRAX bond mutual fund. I'll become more aggressive when the market stops tanking.

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Post by woof755 » Mon Mar 02, 2009 9:33 am

tj218 wrote:"He gone"

Clearly the worst announcer in MLB.


Looking forward to see the Indians beat the White Sox again.
+1, on both counts.

Can of corn for Mags. You can put it on the board. Yes.

Inspiring. :roll:
"By singing in harmony from the same page of the same investing hymnal, the Diehards drown out market noise." | | --Jason Zweig, quoted in The Bogleheads' Guide to Investing

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woof755
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Re: Will I ever have more than I put in?

Post by woof755 » Mon Mar 02, 2009 9:34 am

YDNAL wrote:No one has commented on WB's (mis)fortunes in 2008.
There's a thread on this.
"By singing in harmony from the same page of the same investing hymnal, the Diehards drown out market noise." | | --Jason Zweig, quoted in The Bogleheads' Guide to Investing

YDNAL
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Re: Will I ever have more than I put in?

Post by YDNAL » Mon Mar 02, 2009 10:59 am

woof755 wrote:
YDNAL wrote:No one has commented on WB's (mis)fortunes in 2008.
There's a thread on this.
Actually, there are sufficient WB threads to write a short essay. :)
- Buffett: U.S. Treasury bubble one for the ages
- Warren Buffett's Letter to Berkshire Shareholders 2-28-09
- Buffett and Derivatives
- Buffet's latest of outlook on the economy
- Buffet's 2008 Letter to Shareholders (another poster)
Landy | Be yourself, everyone else is already taken -- Oscar Wilde

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Post by retiredjg » Mon Mar 02, 2009 11:10 am

"Will I ever have more than I put in?
YES!

Ron
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Post by Ron » Mon Mar 02, 2009 11:22 am

1990: +5.35%
1991: +3.55%
1992: +2.59%
1993: +13.49%
1994: +0.18%
1995: +29.75%
1996: +9.84%
1997: +23.78%
1998: +28.72%
1999: +14.40%
2000: +4.79%
2001: -9.82%
2002: -12.30%
2003: +26.34%
2004: +9.44%
2005: +15.33%
2006: +10.91%
2007: +6.28%
2008: -22.95%

What do these numbers represent? Not much, just my Vanguard IRA annual returns since 1990.

BTW, I've had an IRA with Vanguard since 1982, but I didn't keep the records on a spreadsheet since that date. Regardless, you can see as my "actual numbers" are concerned (since 1990), over the long term I did come out ahead (about +8.4 on the above).

It's hard to see the woods when you are standing in them. You can only view "the trees" around you. However, when you stand back and look at the whole "forest", you really get an idea of how big it is. Simply, don't try to project your future based upon a few years of below expected returns.

Am I concerned about the current market? Yes. Am I panicked? No (that's another story).

However, I'm not here to opine on my theory or thoughts on the future; I'm just to show what this "Boglehead" has reaped over the long (albit not total) term investing period, with actual personal data.

- Ron

lambo68
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Maybe not....

Post by lambo68 » Mon Mar 02, 2009 1:41 pm

After over 15 years of investing.....I have less than when I started.....should have left it all in CD's and MMkts.....don't have much hope of me enjoying any profits in my lifetime....hopefully my children will see some benefit's from my efforts when they retire. Unregulated extreme capitalism nor unregulated extreme gov. spending works !!

salem
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Re: Maybe not....

Post by salem » Mon Mar 02, 2009 2:58 pm

lambo68 wrote:After over 15 years of investing.....I have less than when I started.....should have left it all in CD's and MMkts.....don't have much hope of me enjoying any profits in my lifetime....hopefully my children will see some benefit's from my efforts when they retire. Unregulated extreme capitalism nor unregulated extreme gov. spending works !!
Just out of curiosity, what did your asset allocation look like?

lambo68
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Allocation

Post by lambo68 » Mon Mar 02, 2009 5:30 pm

at present I am about 50/50

lad
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Post by lad » Mon Mar 02, 2009 6:46 pm

I've always been conservative (40% stock/60% cash equivalent) for my age (28 ), but am moving all future investments to 100% cash.

One of the Boglehead principles is to take sensible risk to achieve financial goals. Well, I've done some thinking, and with ~$340k in current savings (thank you, real estate bubble) + ability to save $40-50k per year, I don't need the headache of the stock market. I can achieve my goals without it. In fact, the only thing that can prevent me from achieving my financial goals is bleeding $60k+ per year, like I did last year.

I'll leave my existing funds as-is, but no more. The potential reward I get from index funds is not worth the risk. I'm moving toward a 10% - 90% allocation and plan to stick to it until I retire. This is never happening to me again. Even if I lose my job and can no longer save such a high amount, I'd rather have a guaranteed but meager retirement than go through this crap again. Putting money into the current stock market is gambling, plain and simple. I'll stick to investing, even if it has to go into a freakin' coffee can.

I hope others in my generation take the same attitude and put all of the shorts, greedy bankers, and other bailout-industry employees out on the streets, where they belong.

Bulldog Bond
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Post by Bulldog Bond » Mon Mar 02, 2009 7:14 pm

Lambo,

I am assuming that your portfolio was more heavily weighted toward stocks in earlier years, or that portfolio additions were more heavily weighted to recent years.

Bulldog

newbogleuser
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Post by newbogleuser » Tue Mar 10, 2009 2:19 pm

Lad, what about bond funds or treasuries so you get some return?

Diablo-D3
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Re: Will I ever have more than I put in?

Post by Diablo-D3 » Tue Mar 10, 2009 2:28 pm

deepdrive wrote:
mike_slc wrote:March 1st. Monthly portfolio checkup and contribution/rebalancing time. Another brutal month.
That is all.
Maybe cut your contributions in half.
Thats bad advice. Double your contributions.

SP-diceman
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Post by SP-diceman » Tue Mar 10, 2009 3:00 pm

Put more in.

Its a bigger bargain than when you originally bought it.

Your letting emotion cloud your judgment.

Look at some of the long-term market charts that have
been posted.

Will you ever have more than you put in?

Of course.

Thanks
SP-diceman

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deepdrive
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Post by deepdrive » Tue Mar 10, 2009 3:09 pm

tj218 wrote:"He gone"

Clearly the worst announcer in MLB.


Looking forward to see the Indians beat the White Sox again.
Absolutely, 100%, no doubt about it. Hawk Harrelson is the most pompous, arrogant, egotistical piece of crap I have ever had the displeasure of hearing call a baseball game.

As for your second statement, the Indians could beat the Sox all they want, as long as the division turns out like last year: the Sox in first.

But man would I sure like to have the man named Grady on my team.

I was at Progressive Field for two Sox/Injuns games in May 2008. Very nice ballpark, great scoreboard, too.
Investment difficulty and long-term success are perfectly negatively correlated. Keep it simple.

Bigt3142
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Re:

Post by Bigt3142 » Thu Mar 26, 2020 5:58 pm

lad wrote:
Mon Mar 02, 2009 6:46 pm
I've always been conservative (40% stock/60% cash equivalent) for my age (28 ), but am moving all future investments to 100% cash.

One of the Boglehead principles is to take sensible risk to achieve financial goals. Well, I've done some thinking, and with ~$340k in current savings (thank you, real estate bubble) + ability to save $40-50k per year, I don't need the headache of the stock market. I can achieve my goals without it. In fact, the only thing that can prevent me from achieving my financial goals is bleeding $60k+ per year, like I did last year.

I'll leave my existing funds as-is, but no more. The potential reward I get from index funds is not worth the risk. I'm moving toward a 10% - 90% allocation and plan to stick to it until I retire. This is never happening to me again. Even if I lose my job and can no longer save such a high amount, I'd rather have a guaranteed but meager retirement than go through this crap again. Putting money into the current stock market is gambling, plain and simple. I'll stick to investing, even if it has to go into a freakin' coffee can.

I hope others in my generation take the same attitude and put all of the shorts, greedy bankers, and other bailout-industry employees out on the streets, where they belong.
This post was just quoted on "The Money Guy Show". lad made this comment on the very last day of the 2009 recession.

For those of you thinking of jumping off the roller coaster, please consider the following. They ran a hypothetical based on the above information. If lad had left his money invested in an index fund from this point until today (3/24/2020) he would have made 8.8% per year. That $340,000 he had invested would have turned into $860,000. If he would have continued to invest his future investments ($40-50k per year) it could have turned into $1,600,000 today.

earlywynnfan
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Re: Will I ever have more than I put in?

Post by earlywynnfan » Thu Mar 26, 2020 8:14 pm

Excellent post!

I can't get past Deepdrive complaining about Hawk Harrelson, though. Wonder how he feels now that he's in the HOF?

miket29
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Re:

Post by miket29 » Thu Mar 26, 2020 9:34 pm

atomiclightbulb wrote:
Sun Mar 01, 2009 11:45 am
I started investing about ten years ago. The money I invested in stock index funds is now worth less today than it was in 1999. I bought and held, and now I am paying the price for the excesses of Wall Street and the corruption of Washington D.C.

If I had left the money in a CD or bonds I would have done much better.
Your post is a bit unclear; why compare the money you started investing in 2010 (about 10 years ago) to the money you had in 1999?

Silverado
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Re: Will I ever have more than I put in?

Post by Silverado » Thu Mar 26, 2020 9:39 pm

It’s fun when someone digs up such an old thread...

It’s even more fun since we are seeing some turmoil right now. Whoa is me posts always read the same after ten years. “Oops, that was a mistake “ just like we will see in 2030.

22twain
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Re: Re:

Post by 22twain » Thu Mar 26, 2020 10:14 pm

miket29 wrote:
Thu Mar 26, 2020 9:34 pm
atomiclightbulb wrote:
Sun Mar 01, 2009 11:45 am
I started investing about ten years ago. The money I invested in stock index funds is now worth less today than it was in 1999.
Your post is a bit unclear; why compare the money you started investing in 2010 (about 10 years ago) to the money you had in 1999?
'atomiclightbulb' wrote that post in March 2009. According to his profile, he hasn't been "active" here since 2011.
My investing princiPLEs do not include absolutely preserving princiPAL.

manatee2005
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Re: Re:

Post by manatee2005 » Thu Mar 26, 2020 10:28 pm

Bigt3142 wrote:
Thu Mar 26, 2020 5:58 pm
lad wrote:
Mon Mar 02, 2009 6:46 pm
I've always been conservative (40% stock/60% cash equivalent) for my age (28 ), but am moving all future investments to 100% cash.

One of the Boglehead principles is to take sensible risk to achieve financial goals. Well, I've done some thinking, and with ~$340k in current savings (thank you, real estate bubble) + ability to save $40-50k per year, I don't need the headache of the stock market. I can achieve my goals without it. In fact, the only thing that can prevent me from achieving my financial goals is bleeding $60k+ per year, like I did last year.

I'll leave my existing funds as-is, but no more. The potential reward I get from index funds is not worth the risk. I'm moving toward a 10% - 90% allocation and plan to stick to it until I retire. This is never happening to me again. Even if I lose my job and can no longer save such a high amount, I'd rather have a guaranteed but meager retirement than go through this crap again. Putting money into the current stock market is gambling, plain and simple. I'll stick to investing, even if it has to go into a freakin' coffee can.

I hope others in my generation take the same attitude and put all of the shorts, greedy bankers, and other bailout-industry employees out on the streets, where they belong.
This post was just quoted on "The Money Guy Show". lad made this comment on the very last day of the 2009 recession.

For those of you thinking of jumping off the roller coaster, please consider the following. They ran a hypothetical based on the above information. If lad had left his money invested in an index fund from this point until today (3/24/2020) he would have made 8.8% per year. That $340,000 he had invested would have turned into $860,000. If he would have continued to invest his future investments ($40-50k per year) it could have turned into $1,600,000 today.
Some people just don’t have the stomach for the volatility.

justsomeguy2018
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Re: Re:

Post by justsomeguy2018 » Thu Mar 26, 2020 10:39 pm

Bigt3142 wrote:
Thu Mar 26, 2020 5:58 pm
lad wrote:
Mon Mar 02, 2009 6:46 pm
I've always been conservative (40% stock/60% cash equivalent) for my age (28 ), but am moving all future investments to 100% cash.

One of the Boglehead principles is to take sensible risk to achieve financial goals. Well, I've done some thinking, and with ~$340k in current savings (thank you, real estate bubble) + ability to save $40-50k per year, I don't need the headache of the stock market. I can achieve my goals without it. In fact, the only thing that can prevent me from achieving my financial goals is bleeding $60k+ per year, like I did last year.

I'll leave my existing funds as-is, but no more. The potential reward I get from index funds is not worth the risk. I'm moving toward a 10% - 90% allocation and plan to stick to it until I retire. This is never happening to me again. Even if I lose my job and can no longer save such a high amount, I'd rather have a guaranteed but meager retirement than go through this crap again. Putting money into the current stock market is gambling, plain and simple. I'll stick to investing, even if it has to go into a freakin' coffee can.

I hope others in my generation take the same attitude and put all of the shorts, greedy bankers, and other bailout-industry employees out on the streets, where they belong.
This post was just quoted on "The Money Guy Show". lad made this comment on the very last day of the 2009 recession.

For those of you thinking of jumping off the roller coaster, please consider the following. They ran a hypothetical based on the above information. If lad had left his money invested in an index fund from this point until today (3/24/2020) he would have made 8.8% per year. That $340,000 he had invested would have turned into $860,000. If he would have continued to invest his future investments ($40-50k per year) it could have turned into $1,600,000 today.
That was rather eye opening. Wonder if lad has stayed at 10-90 this entire time.

Who knows - a big enough crash this time and he may still end up coming out ahead!! :P

Alex GR
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Re: Will I ever have more than I put in?

Post by Alex GR » Fri Mar 27, 2020 7:52 am

Great epic thread. We should refer anyone who wants to capitulate here. S&P has tripled in size since March 2009.

Having said that, yesterday (Thurs. March 26th) at day close, my portfolio was $20k less than the amount I put in when I started in 2017 (not considering new contributions). In other words, if hadn't made any new contributions, the amount would be $20k less than the amount I started with 3 years ago.
Will I ever have more than I put in??? :greedy

Momus
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Re: Will I ever have more than I put in?

Post by Momus » Fri Mar 27, 2020 8:15 am

Stocks: If you can't handle me at my worst -60%, you don't deserve me at my best 10%/yr (30x return after 40 yrs). Go ahead and accept a mediocre return at 1.5% in saving account.

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