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Location: Was Midvalley Oregon; Now Eastside Seattle area
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Quote:
Originally Posted by KurtGibson
Not all the time, but sometimes...
2008 stole 16% of my accounts.
...and I have a weird feeling I'm not the only one.
My friends and I, lost 40% from peak, regardless of allocation, 2007-2009. Passive. Mutual funds.
Loss is a paper loss. It was never realized in the up side. It was a loss when the 10 years of contributions of the ,late '90s and to '08 vanished .
Last edited by leastprime; 05-03-2018 at 12:15 AM..
there was a crash in 2008 ? had someone slept through it and just left their funds alone , when they woke up they would not know it happened . the insight growth model was down 42% in 2008 up 32% the next year and up 17% the year after that.
i see a total market fund was down 37% in 2008 , up 29% in 2009 and up 17.50% in 2010 .
even a retiree pulling the plug in 2008 is no different 10 years in than any other average retiree group .
so overall not much to talk about once the smoke cleared unless it was something an investor did to themselves.
Last edited by mathjak107; 05-03-2018 at 03:05 AM..
there was a crash in 2008 ? had someone slept through it and just left their funds alone , when they woke up they would not know it happened . the insight growth model was down 42% in 2008 up 32% the next year and up 17% the year after that.
i see a total market fund was down 37% in 2008 , up 29% in 2009 and up 17.50% in 2010 .
even a retiree pulling the plug in 2008 is no different 10 years in than any other average retiree group .
so overall not much to talk about once the smoke cleared unless it was something an investor did to themselves.
The lost decade, 2000-2009 was a great time to buy stocks, and the year 2008 was the best year of the decade to buy stocks. Those of us who invested in US stock index funds and never sold did very well. I think some international stock index funds also did well, but I was never involved in that market.
I was never that concerned about the stock market decline during that period, because I have absolute faith in the long term stock market increase.
The lost decade, 2000-2009 was a great time to buy stocks, and the year 2008 was the best year of the decade to buy stocks. Those of us who invested in US stock index funds and never sold did very well. I think some international stock index funds also did well, but I was never involved in that market...
In dollar-denominated terms, many foreign markets have yet to revisit their 2007 peak. European markets fell some 70% peak-to-trough, in dollar terms, in 2007-2009. In some cases, the loss was comparable to what happened to those markets during the Great Depression.
Just look at what happened to the Vanguard European Index Fund. It would take years of heady gains beyond the present level for that fund just to retrace where it was in 2007. Meanwhile, the Japanese stock market has yet to return to where it was 30 years ago.
the problem we have when comparing countries is it always assumes you only invest in that countries markets and no where else in the world .
most funds are not land locked . even the s&p 500 has a big percentage in foreign exposure . i think 25% of all s&p 500 income comes from overseas holdings and operations giving even that index foreign exposure .
so while individual foreign markets lagged and may never have hit new highs that does not mean their investors did not .
in fact many times the highs hit and used as benchmarks were really errors in pricing and should never have been at those levels in the first place ala the dot com era ..
gold at 850 in the 1970's is an example of a price that should never have been , yet it served as some kind of benchmark for gold for decades as to golds performance .
the prices of the dot coms were another example. it took nasdaq a long time to get back to those high's it should have never been at in the first place because those highs were really a pricing error and should never have been . so using them as a benchmark to judge the future levels does not make a whole lot of sense .
markets find their own levels like water , but if you catch a particular high never seen before the water levels off you really are looking at a level that really should not be considered "the level " so to speak . would you sell your car and only buy a canoe if you lived in new orleans because of water level in katrina ?
of course not , because you know that water level was a glitch and does not reflect daily life .
the real benchmark is how you do personally over your time frame with your investments.
my benchmark is how i do vs , just doing nothing and throwing everything in a cd and calling it a day . there really is nothing else i can compare to since we all rebalance , add money , buy ,sell at different times as well as have different tax implications . that in itself make any comparison to a static index very difficult .
buying in to a fund with a higher fee at a better time can easily beat the boglehead with the lowest fee funds so comparisons can be very difficult .
Last edited by mathjak107; 05-06-2018 at 04:25 AM..
My benchmark is how I do with a 100% buy-and-die S&P 500 portfolio allocation, vs. any conceivable alternative... bonds, small-cap, international equities, Persian rugs, Greek banks, gold, pork-bellies or pet rocks (just to give a brief sample).
Every investment-scheme extols some form of diversification. Yes, many of the companies in the S&P 500 have international exposure, be it lots of sales that happen beyond American shores, or foreign suppliers, foreign real-estate holdings or whatever else. But these companies are by definition part of a benchmark American stock index. Most paeans to portfolio diversification say that we ought to hold some representation of companies that are listed on the London, Frankfurt, Tokyo and whatever other stock-exchanges.
Last year's story of a muscularly ascendant stock-market was really the story of three marquee indices: Dow, S&P 500 and NASDAQ. Those three are featured on the newscast-ticker in every airport or hotel-lobby in America. This year's story about a January run-up followed by correction/malaise, is also really the story of the three marquee indices. And for most investors, the Dow and NASDAQ are sideshows, since it is the S&P 500 that's the darling of index-funds, and not the other two.
So, who cares? Well, the basic idea, is that diversification beyond the S&P 500 benefits us in at least two ways: less volatility, and higher cumulative gains. There's all sorts of wisdom on the "right" mix of other kinds of equities, and obviously, there's no agreement about the right mix (if there were, the financial services industry would obviate itself out of existence). But there is something approaching agreement, that in general, we should NOT just be 100% in the S&P 500.
Well, my observation is that recent decades' experience does appear to favor a 100% S&P 500 portfolio. Is this a fluke?
Most people on this forum are Americans, based in America, investing American dollars. Fine. But this skews our perspective. If we were British, based in Britain, investing in British Pounds, presumably we'd be investing mostly our home-index, the FTSE. And instead of celebrating a pretty substantial gain since 2009, we would instead be lamenting how our marquee equity-index has gone nowhere for 20 years.
This is why I keep getting so frustrated! First, there's a big world out there, outside of America. Yes? Second, for Americans, it seems like willfully being oblivious, and ignoring that world, is actually a good investment strategy. It's not dumb, it's not benighted... it's actually quite profitable. It shouldn't be that way, should it? But it is. This is why I'm so frustrated.
My wife has a keyboard in her home office setup with multiple monitors. Tough to do any sort of office work on an iPhone/iPad.
I’m not sure what that has to do posting on city data or my response indicating I clearly overlooked the physical keyboard aspect
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