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Old 01-22-2017, 05:27 AM
 
71,790 posts, read 71,896,917 times
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every asset with a plan eventually does fine , even gold . it is all a question of time and how long you wait .

don't forget , even if you bought a 50/50 mix of gold and the s&p 500 decades ago at the highest point in time when it was 800 an ounce ,. simply rebalancing that s&p fund with the gold had gold beating the s&p 500 when gold hit it's almost 2,0000 buck highs .

the plan and the time it takes is more important than the asset .
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Old 01-22-2017, 05:31 AM
 
71,790 posts, read 71,896,917 times
Reputation: 49345
Quote:
Originally Posted by DaveinMtAiry View Post
Good pull. Before making my post I looked at decades and the 30's is the only decade where the market was down. But you are obviously right.

Regardless the poster was out of line to tell the other poster that he was "unimaginably dumb " by pointing out that the stock market always recovers because that poster was right, the stock market does always recover and if you just hold on long enough you can't lose money.
keep in mind it is only real cagr's that count , not nominal cagr's befor inflation . the market being up but losing big time in a year to inflation is a loss in reality.

you really need to do your comparisons based on real returns each year . those heat maps are all real return adjusted . that makes them particularly interesting as well as some of the outcomes very interesting .
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Old 01-22-2017, 05:36 AM
 
71,790 posts, read 71,896,917 times
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here is another very popular model called the coffee house portfolio . note it had more years with a negative or no real return than the butterfly . that is because it used no gold to set a real return floor in down markets .

10% Large Cap Blend
10% Large Cap Value
10% Small Cap Blend
10% Small Cap Value
10% Total International
40% Total Bond Market
10% REIT


Last edited by mathjak107; 01-22-2017 at 05:45 AM..
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Old 01-22-2017, 05:44 AM
 
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another very popular model is the swenson portfolio . it used no gold but counted on a lot of international .
30% Total Stock Market
15% International Developed
5% Emerging Markets
30% Int. Term Treasuries *
20% REIT


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Old 01-22-2017, 07:05 AM
 
Location: Mount Airy, Maryland
10,478 posts, read 5,944,584 times
Reputation: 16173
I see a whole lot more blue than red in every chart posted.
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Old 01-22-2017, 07:58 AM
 
71,790 posts, read 71,896,917 times
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markets are up 2/3's of the time and down only 1/3 on average . there should be more blue .

in fact since 1972 markets have been down 32% of the time , had real returns of an average of 7.40% , had an average of 17% swings up or down.

60/40 lost money 28% of the time , had a real return of 5.80% and average swings of 11.80%

the butterfly lost money 17% of the time , average real returns of 6.80% , average swings 7.60%

coffee house lost money 23% of the time , 6.30% real return average and swings of 10.80%

swenson portfolio lost money 26% of the time , real return average was 6.50% and swings averaged 11.60%

Last edited by mathjak107; 01-22-2017 at 08:06 AM..
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Old 01-22-2017, 08:21 AM
 
71,790 posts, read 71,896,917 times
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here is another interesting popular one called the ivy portfolio. it has been promoted by Mebane Faber .

20% Total Stock Market
20% Total International
20% Total Bond Market
20% Commodities
20% REIT

it lost money 26% of the time , had real return averages of 6.10% and swings averaging 10.70%


Last edited by mathjak107; 01-22-2017 at 08:56 AM..
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Old 01-22-2017, 08:34 AM
 
71,790 posts, read 71,896,917 times
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the point to all of the above is there are so many different portfolio's out there and most arrive to about the same point in gains if they are not 100% stock .

the only question is do you want a smoother ride or one filled with deeper valley's and higher peaks to get to the same point . while the past may not reflect the future ,the past is all we have to gauge by . some folks like that wild up cycle in a bull market and don't fret the down cycle. others want a tighter range .

it all depends on you and your time frame . there certainly are enough existing simple models to pick from in the lazy portfolio world .
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Old 01-22-2017, 09:36 AM
 
Location: Myrtle Creek, Oregon
12,293 posts, read 12,533,436 times
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Quote:
Originally Posted by Luvvarkansas View Post
Did you mean stocks? Don't anyone laugh, I have no idea if there is some kind of investment term called "socks".

Thanks for all the suggestions. Some of it is over my head. As in: "You didn't indicate whether this was deferred or post-tax dollars." I don't know....I guess deferred because it is called a "deferred retirement option" or something like that. And: "which I will activate next year when my RMD's come due." I don't know what RMD's are, but I will google it. Ok, got it.

"In my case, I don't want to spend retirement following the stock and bond market." This is me.

I've never had any money, so I don't know what to do with it! My mom had about 200,000 (life insurance) after my dad died and she had it in the stock market (at one point it grew to about 300,000, I think) but got it out when the market started plunging. Now, about 20 years later, it's all gone and she doesn't have much to live on. I've thought a many a time over the years, when she would fret about it, that I was glad to not have any money to worry about losing. lol
No, it's not a typo, it's a figure of speech. If you want a safe place to keep your money, put it in your socks. The one thing a burglar never steals is your socks. If you have a roll of cash, stuff it in your socks and keep it in your sock drawer. The one place a mugger never looks is in your socks.
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Old 01-22-2017, 10:42 AM
 
Location: Paranoid State
13,047 posts, read 10,460,401 times
Reputation: 15684
Quote:
Originally Posted by Luvvarkansas View Post
I'm not sure investing is for me....the mattress idea is looking good. LOL
You are not alone. The only reason you can expect a return on any investment is because you are willing to take on a risk that someone else is not willing to accept. It is certainly rational for you or anyone else to say "I'm not willing to accept that risk" with regard to any potential investment.

Well, there is another reason: you find that someone else makes a mistake and you take advantage of it, but that is harder to find.
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