Either you fret over every price move and likely buy/sell at the worst times, or you invest with a long-term vision and stop tracking the price moves everyday.
As far as rebalancing --- you may have noticed stocks and bonds falling in unison this year, so rebalancing is not much help.
https://www.multpl.com/s-p-500-pe-ratio/table/by-year
And not sure what your comment on rebalancing not being much "help" is. Rebalancing is not about "help" it's about sticking to an investing approach.
And I can recall back in the early 2000's when people said "Equity growth will never be like it was the 90's".
Glad I never listened to them.
If rates go up drastically, government debt payments go up.
The game must go on! *until the us empire collapses, taking down with it the western world
But EU has had negative interest rates for years, and will collapse (break up the eu monetary union) before USA goes under. Dollar strength confirms capital is moving into USA.
That is the price. Worth and value are different than price.
If that $8M now buys about the same amount of blueberries or house as $3M in 2007, then it kept pace. Except for paying the capital gains on $5M.
If you're asking about inflation, it is usually measured as an increase in prices.
You need to be a long-term investor for a limited term. But hard to know when that term is over.
So I think when markets go up you should seriously consider taking some money out and using it for leisure and travel and education investing in yourself. But taking money out and spending it is not usually considered prudent investing. Especially because taking money out means you must pay taxes on it. So you stay in the market and soon most of your long-term gains are wiped out, and you have to be a "long term investor" all over again.
So if your goal is retirement and you're 30, you can tolerate higher risk because if the market crashes, you've got 30 years to wait for it to recover. If you're 60 and retiring in a few years, your risk tolerance is low. And you can slowly adjust your portfolio in between.
Doesn’t exist. Sorry bud.
That's the idea that I am criticizing. Risk might be necessary, but never sufficient.
BTW I don't think, you think that way, but neither should you. Gratuitous condescension poisons the well.
It's a basic precept of investing. In a very simplified way - higher returns require higher risk of invested capital - why else would you invest in something higher risk unless the return justifies it? And likewise, people will accept lower returns if they know the risk is low.
Nobody is doing payday loans at prime because the risk isn't justified by the return.
When you start looking at portfolio allocation across multiple investments, it gets more complicated because you can actually achieve the same return at lower risk through diversification across classes of assets.
But to answer your original question - the only way to guarantee short-term and long-term positive returns (as you put it "if my goals change, I don't want to lose money") is to invest in low risk investments. Low risk investments mean low returns.
Exactly! Why did you think I said anything about not taking risks. I didn't say that either. I was misinterpreting on purpose to show yours.
> "if my goals change, I don't want to lose money"
I did not say that either. I vehemently agree with everything else that you said.
You said "This a very popular idea but I don't fully accept it. Goals and desires are not static. They are path dependent and adaptive. I want a funding scheme that's able to fund that."
Which I interpret as "I reject the idea of setting some financial goal decades into the future. I want a scheme that is flexible and can accommodate changes to how I want to use my money."
How is that different than "If my goals change, I don't want to lose money."?
> How is that different than "If my goals change, I don't want to lose money."?
… and I don't see at all how they are equivalent. I might be willing accept the possibility of losing some money if there is a notable increase in the possibility of meeting my updated goal.
I doubt that we have any fundamental disagreement. You have a good day.
With $50m if your portfolio averages 4% a year you would be clearing $2m then pulling out $300k for 1.7 gain. You only pay tax on the income withdrawn