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And I have given you that information, to the best that anyone can about any investment, ever: the growth of the US economy over the next 30 years is what is going to make stock prices go up. Economic growth is ultimately what fuels the growth of companies, and thus the growth of the stock market.
This is what I'm confused on, because you are saying that if the Economy is growing and the companies I'm investing in are growing, the value of the Stock Prices will grow. But from the reading and studying I have done up on Stocks, I am being told it's not directly tied to the Economy and that Stock Price Appreciation is based on variables that are unrelated. Can you direct me to more information on how you concluded that Stock Prices are tied to Economic Growth and Growth of the companies I'm investing in? That's the main thing I'm trying to figure out, what is the Stock Price Appreciation based on, if I can get over that hurdle maybe I can look at doing something.
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Do you think the US economy will be larger in 30 years than it is now? If yes, buy stocks in US companies. (The safest, most conservative way to do so is buy buying indexed funds. The much riskier but potentially far more profitable way is to buy shares in individual companies.)
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Do you think the global economy will be larger in 30 years than it is today? If so, buy stocks in foreign companies as well as US companies (same caveats apply as to risk versus reward).
I would say from 2016 - 2046 we are going to see the fall of the US as the world's super power, but I don't believe that there would be ONE main super power going forward, what I believe will happen is that power will be spread out more evenly further displaying a total Globalization focus. So if I were to do Stocks, I would do funds that hold every blue chip US company and similar for foreign companies, while also holding some investment grade Bond portfolios. I would only put about 50% of my passive monies into Stocks/Bonds (with Vanguard) with the rest staying in Long Term Brokered CDs. Of that 50% I'm bringing over to Vanguard, 70% goes into Bonds and 30% of it goes into Stocks. So overall, my Portfolio would hold only 15% totally diversified blue chip US/foreign Stocks, 35% Investment Grade only Bonds and 50% Brokered CDs.
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But again, you DON'T have that information on your current investments either! If you have a bond or a CD that's yielding 3% and the interest rate increases to 4%, your investment you understand is now yielding a profit of -1% (in other words, you're now losing money - the very thing you fear about stocks).
I'm not losing any money, I might be losing an opportunity to make a better rate, but I'm not losing any money just because my rate is at 2.5% for example and there's rates going for 3%. I'm never going to be able to position myself in the CD or Bond market to ALWAYS have the highest rate. I just want to make sure my rate is "about on par" with the "highest paying rates" out there and I hold to maturity. Unless I'm holding something at 3% and the market is way up at 6%, that's the only time I would look at trading a Bond. But if I'm at 3.25% and there's some on the market at 4%, I'm not going through the hassle, I'm never going to have the highest rate all of the time.
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And the sort of totally unpredictable black swan event you seem to be especially fearing as far as the stock market goes won't stay confined to the stock market should it occur; it will affect your current non-stock investments, too. Any time an economy contracts (either temporarily or permanently), every sector of that economy is ultimately affected. The Great Depression started as a stock market crash, but it quickly spread to affect the value of bonds, real estate, and even cash. The 2007-2008 crash started in a few local real estate markets, but it spread to stocks and bonds, and also to real estate markets liker mine (Omaha) where none of the fundamentals had changed at all.
I 100% agree with you. All I'm trying to determine is what makes a Stock Price Appreciation, is it the growth of the economy and the companies/sectors I hold stock in? Is it CNBC praising the S&P? What makes it go down? Is it Jim Cramer saying XYZ CEO svcks? Is it other Traders that don't like XYZ CEO because he cheated on his wife and called his wife a "pig", thus they don't to hold his stock anymore? These are the questions I still have.
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Stocks aren't harder to understand than bonds, CDs, real estate, or any other investment, so I don't know why you persistently pretend that they are. And the short term fluctuations in their prices are simply random noise (just like short term fluctuations in real estate prices). You have to think long-term when investing in anything, and you don't want to let fear of short-term paper losses paralyze you so that you miss out on the longer-term gains (which is exactly what most people do, to their detriment).
As I mentioned, I run a small business so you can tell that I'm not a person that's afraid to take risks. I'm flat out confused on how people make money with Stocks in terms of what makes the Stock Prices Appreciate, because at the end of the day that's where the money will come from. They might pay out dividends or they might not, my money is going to come from buying Vanguard's fund at $192 and holding it while it eventually goes up to $500 within 25 years which is an average per year return of 6.4%. I'm trying to figure out how is it going to get to $500, or again, am I missing something here?
fear-greed -perception of the company's future growth.
but unlike a privately held business , stocks have the advantage of all stocks generally rising or falling with the tide as well.
since over most long term investment periods stocks are up 2/3's of the time and only down 1./3 even the tide can elevate you based on others .
it is a process that has not failed to generate increases in value over all 15 year or longer time frames over 147 years.
will it continue ? likely yes but we can also get hit with an asteroid tomorrow so if you are looking for iron clad guarantees buy insurance products not investments.
personally i think you are letting good money you make with the business die on the vine by not working for you . you could have lost 30% of it the last 6 years and been a head
That's has to be one of the worst allocations for a 32 year old I've seen
50% cds 35% bonds and 15% equites
Sure your risk tolerance is the main driver but that's bad 30-40 year election
That's the best I'm going to do, I might go as high as 25% in Stocks and spread out the CDs and Bonds a little more, I'm not going higher than that though. No way.
Just want to use Stocks as a way to add maybe a 1% boost or maybe a 2% boost to my overall return. So instead of a aggregate average of 3.25% or 3.5%, maybe get that to about 5%. I'll take that, hell I will take 3% right now.
fear-greed -perception of the company's future growth.
but unlike a privately held business , stocks have the advantage of all stocks generally rising or falling with the tide as well.
since over most long term investment periods stocks are up 2/3's of the time and only down 1./3 even the tide can elevate you based on others .
it is a process that has not failed to generate increases in value over all 15 year or longer time frames over 147 years.
will it continue ? likely yes but we can also get hit with an asteroid tomorrow so if you are looking for iron clad guarantees buy insurance products not investments.
personally i think you are letting good money you make with the business die on the vine by not working for you . you could have lost 30% of it the last 6 years and been a head
Mathjak so I go buy this Vanguard fund for $192, okay? I hold it for 33 years. To get to an average return of 6% per year, the fund's price has to go up to $500, isn't that correct? Or am I off base? If I'm correct, how is this thing getting to $500?
OR, do I wait until the Fed increases the rates, wait for the prices to come down and then jump in?
Mathjak so I go buy this Vanguard fund for $192, okay? I hold it for 33 years. To get to an average return of 6% per year, the fund's price has to go up to $500, isn't that correct? Or am I off base? If I'm correct, how is this thing getting to $500?
OR, do I wait until the Fed increases the rates, wait for the prices to come down and then jump in?
don't wait , the fed increasing rates is a vote of confidence the economy is getting better . stocks may well go up .
we don't know what the average gain will be over 33 years . i can tell you for every 10k i invested in the newsletter portfolio i used is worth 203k today 27 years later without adding a dime 100k is more than 2 million . it was just a mix of regular fidelity funds .
you can do the math .
at 6% 192.00 bucks over 33 years is 1313.00 compounded ,
don't wait , the fed increasing rates is a vote of confidence the economy is getting better . stocks may well go up .
we don't know what the average gain will be over 33 years . i can tell you for every 10k i invested in the newsletter portfolio i used is worth 203k today 27 years later without adding a dime 100k is more than 2 million . it was just a mix of regular fidelity funds .
you can do the math .
t 6% 192.00 bucks over 33 years is 1313.00
No, not investing $192, I was referring to buying the Vanguard S&P Fund which has a price of $192 right now.
Can you give me that study again? Listen, I'm not trying to be a prick to you guys (I know I'm a little bit of an arrogant a-hole, but come on, who isn't a little arrogant right ), I'm trying to understand this potential investment.
I will hold onto the thing for 25 years, I get that, but I need to know that buying the fund at $192 that it will go up to $500 in purchase price by 2041, that's the only way I'm getting a 6% plus return per year from this thing. If this thing doesn't go up to $500 in price, how am I getting my 6% per year return then? Where is it going to come from??
No, not investing $192, I was referring to buying the Vanguard S&P Fund which has a price of $192 right now.
Can you give me that study again? Listen, I'm not trying to be a prick to you guys (I know I'm a little bit of an arrogant a-hole, but come on, who isn't a little arrogant right ), I'm trying to understand this potential investment.
I will hold onto the thing for 25 years, I get that, but I need to know that buying the fund at $192 that it will go up to $500 in purchase price by 2041, that's the only way I'm getting a 6% plus return per year from this thing. If this thing doesn't go up to $500 in price, how am I getting my 6% per year return then? Where is it going to come from??
He was talking about 192 share price increasing 6% for 30+ years would mean a price over 1300.00
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), I'm trying to understand this potential investment. 
