Hacker News Reader

Hacker News

Comment by branchless | Hacker News Reader

Parent Full thread

branchless

The FTSE is where it was 17 years ago. Since this time everything has gotten way more expensive.

Anyone in the UK following this advice from age 20 to 35 is staring down the barrel of working forever.

The problem is they have a share in growth in the UK over the past 15 years and that growth is next to nothing.

IMHO the old advice needs to be taken with caution. This is not your dad's market.

View on HN

1) If you put all of your money in exactly 17 years ago, then, yes. You would be at the same place.

2) It still would've been paying you dividends that entire time

3) If you, rather than investing an imaginary lump sum at the top of the market 17 years ago, invested slowly as your savings accumulated over time, you would be ahead.

The FTSE hasn't exactly been sitting still all those 17 years.

I'm not sure point 3 is correct. Buying regularly would have seen you buy below today's price and above it.

Dollar cost averaging lowers risk and increases returns. If you can afford it, you may also want to have a look at value averaging.

It lowers risk making returns and/or losses less volatile. It does not increase returns. Of those dumping a lump sum in some lose more some win more and averaging them smooths it out. It's not a magic have your cake and eat it.

Yes, there was a bubble so if you invested all in one hit, all in equities, your timing was unlucky and you ignored the return from dividends then it doesn't look good.

Selective end points. Dollar cost averaging is a simple way of solving this particular problem.

The FTSE 100 total return index is at 5,898.87 i.e. the levels of November 2012: https://www.google.com/finance?cid=15424700

google finance for that goes back to 2012 and no further!

i don't know much about stocks but agree with your last line in general, encapsulated by patio11's tweet

    I occasionally get asked for advice by students. Biggest one: resist following scripts which evolved to serve a world which no longer exists

You have to adjust for dividends.

Reply on news.ycombinator.com