Hacker News Reader

Comment by jeberle | Hacker News Reader

Looking back to 1971, for any 20 year period the S&P 500 netted a gain. For the last 20 years, that gain was 6% per year. OK, but not what I would term "crushing" performance.

For the last 10 years, the S&P 500 is down 2.5% on an annual basis. You could have done better w/ govt bonds & CD ladders.

I think the 20 year plan assumes a greater will power than the greater investing community possesses.

View on HN

Right, you can cherry pick 10 year periods of time when the S&P did good, but don't forget about all those times it crashed. The problem with following Wall Streets advice to put all your money in stocks is that they make too much money from trading commissions to trust them for impartial advice.

Typical investment advisors tell you to buy stocks and then point out that over the last century stocks have done very well. The problem is that none of us are investing on 100 year long timelines. We are usually investing on 30-40 year timelines and hoping to have a good amount saved when we retire. If you happen to need to retire and start pulling money out in a bad year like 2008, you're screwed.

Check out this allocation for returns as good as stocks without the huge downside risk: http://crawlingroad.com/blog/2008/12/22/permanent-portfolio-...

S&P 500 today is not made up of the same companies as back in 1971. The 6% annual growth excludes any companies didn't do well and were delisted or got wiped out (100% loss of investment).

Reply on news.ycombinator.com