Go Back   Alberta Outdoorsmen Forum > Main Category > General Discussion

Reply
 
Thread Tools Display Modes
  #61  
Old 02-24-2021, 01:29 PM
Maxwell78 Maxwell78 is offline
 
Join Date: Jun 2011
Posts: 501
Default S&P 500 intra year declines vs calendar year returns

The chart youíre looking at is the calendar year returns on the S&P 500 going back to 1980. Thereís a lot of data here, so letís just deal with the far left-hand side for example, 1980. In the calendar year 1980, the stock market went up 26%. Pretty good year. But what that red dot is showing is the inter-year decline of 17%. So think about what happened here. As the market begins a new year in 1980 obviously, it must have started to accelerate to the positive, and it goes up for a while. And then it rolls over, starts to go down, and everybody has a different threshold of pain, and it goes down 5, 6, 7%, and all of a sudden, weíre reading about Brexit or default or fiscal cliffs, and we become concerned. At some point as it goes down to, letís say, 12, 13%, we believe that we should extricate ourselves from the market. This is fun with math only, but on that red dot, down 17%, if you got out of the market on that day, your cost of opportunity was 40%, because if you put a dollar in on that day, you got a 40% return. Thatís how you win. You cannot achieve your long-term goals in the stock market by consistently crystallizing losses every time it goes down.

The important thing to note on this chart is those red dots, that every year without exception, at some point during the year, there is a negative rate of return achieved. Itís how you deal with that event that will determine how financially successful you are over time.

Just some food for thought. It's what i live by

Take care everyone
Attached Images
File Type: jpg S&P 500.jpg (37.4 KB, 41 views)
__________________
"This year will go down in history. For the first time, a civilized nation has full gun registration. Our streets will be safer, our police more efficient, and the world will follow our lead into the future!" 1935-Adolf Hitler
Reply With Quote
  #62  
Old 02-24-2021, 01:41 PM
350 mag 350 mag is offline
 
Join Date: Jul 2009
Location: North Sask.
Posts: 348
Default

Quote:
Originally Posted by badbrass View Post
It has been said before ď live within your means ď but that does not connect to the brain of some. And put away for the bad time. We were always taught! You see it now selling toys for next to nothing because you canít afford it, and really you never could!
Buying 70,80,90,k trucks or SUVs

Is NOT living within your means.

The Rich put their money to work.

They buy assets that appreciate in value, borrow AGAINST those assets. Now you have a loan and IF you borrow to invest the interest is tax deductible.

Too many out there want every toy in the book....so they look rich but their bank accounts are empty.

Then when they hit retirement age they are screwed.

Their standard of living drops to that of someone living on the poverty line.

STOP buying liabilities that depreciate in value....
Reply With Quote
  #63  
Old 02-24-2021, 03:57 PM
raab raab is offline
 
Join Date: Oct 2009
Posts: 5,071
Default

Quote:
Originally Posted by 350 mag View Post
Buying 70,80,90,k trucks or SUVs

Is NOT living within your means.

The Rich put their money to work.

They buy assets that appreciate in value, borrow AGAINST those assets. Now you have a loan and IF you borrow to invest the interest is tax deductible.

Too many out there want every toy in the book....so they look rich but their bank accounts are empty.

Then when they hit retirement age they are screwed.

Their standard of living drops to that of someone living on the poverty line.

STOP buying liabilities that depreciate in value....
This is good advice right here. Buy things that make you money. With regards to the market if you're invested in a company that's not paying a dividend it's not an investment. Its speculation that the stock will grow over time. I may not see the huge returns of some on here but I get my 5-6% every year no matter what the market does. The bonus is dividend stocks are usually valued higher, and therefore have more demand. As a result the stock usually holds its value as long as they can pay the dividend.
__________________
Bill Gates can't defend windows from viruses so what makes you think he can or will protect humans.
Reply With Quote
  #64  
Old 02-24-2021, 06:41 PM
sendmethem sendmethem is offline
 
Join Date: Nov 2017
Posts: 43
Default

Quote:
Originally Posted by FCLightning View Post
x2
x3
Reply With Quote
  #65  
Old 02-24-2021, 07:44 PM
roper1 roper1 is offline
Moderator
 
Join Date: Aug 2012
Posts: 4,094
Default

Quote:
Originally Posted by Maxwell78 View Post
The chart youíre looking at is the calendar year returns on the S&P 500 going back to 1980. Thereís a lot of data here, so letís just deal with the far left-hand side for example, 1980. In the calendar year 1980, the stock market went up 26%. Pretty good year. But what that red dot is showing is the inter-year decline of 17%. So think about what happened here. As the market begins a new year in 1980 obviously, it must have started to accelerate to the positive, and it goes up for a while. And then it rolls over, starts to go down, and everybody has a different threshold of pain, and it goes down 5, 6, 7%, and all of a sudden, weíre reading about Brexit or default or fiscal cliffs, and we become concerned. At some point as it goes down to, letís say, 12, 13%, we believe that we should extricate ourselves from the market. This is fun with math only, but on that red dot, down 17%, if you got out of the market on that day, your cost of opportunity was 40%, because if you put a dollar in on that day, you got a 40% return. Thatís how you win. You cannot achieve your long-term goals in the stock market by consistently crystallizing losses every time it goes down.

The important thing to note on this chart is those red dots, that every year without exception, at some point during the year, there is a negative rate of return achieved. Itís how you deal with that event that will determine how financially successful you are over time.

Just some food for thought. It's what i live by

Take care everyone
I hope the OP takes the time to read this & understand it. I started investing in my 20's because my workplace had a 'voluntary' matching RRSP. It was voluntary but there was a lot of pressure to join.

Totally young & naive, I was lucky enough to get some decent returns early, back when you got a paper statement quarterly. I was naive yes, but I could read, & I could see the numbers getting larger through growth, despite bigass recessions & downturns.
Reply With Quote
  #66  
Old 02-24-2021, 08:45 PM
EdmontonEli EdmontonEli is offline
 
Join Date: Nov 2020
Posts: 32
Default

Dave Ramsay's total money make over

And John Bogle's The Little Book of Common Sense Investing
Reply With Quote
  #67  
Old 02-25-2021, 06:52 AM
350 mag 350 mag is offline
 
Join Date: Jul 2009
Location: North Sask.
Posts: 348
Default

Quote:
Originally Posted by roper1 View Post
I hope the OP takes the time to read this & understand it. I started investing in my 20's because my workplace had a 'voluntary' matching RRSP. It was voluntary but there was a lot of pressure to join.

Totally young & naive, I was lucky enough to get some decent returns early, back when you got a paper statement quarterly. I was naive yes, but I could read, & I could see the numbers getting larger through growth, despite bigass recessions & downturns.
This is sound advice.

Even though today interest rates are so low it's hard for even large pension funds have trouble making yields.

The beauty of compound interest, reinvestment of tax returns.

Start when your 18(10% per year) and by the time your 58 you will likely be wealthy.....
Reply With Quote
  #68  
Old 02-25-2021, 07:58 AM
bigbuck's Avatar
bigbuck bigbuck is offline
 
Join Date: Aug 2009
Location: Langdon, AB
Posts: 404
Default

Check out the Money Guy Show on youtube or podcasts. These guys are great at explaining the power of compound interest. Obviously the earlier you start the better but they show examples on how powerful your money can be in your 30s, 40s, and even 50s. Turning 34. Really wish I started out of high school as opposed to 27 years old but it is never to late!
__________________
Instagram: @albertahuntingcrew
Reply With Quote
  #69  
Old 02-25-2021, 12:32 PM
mryimmers mryimmers is offline
 
Join Date: May 2018
Location: NWO
Posts: 89
Default

If you want to be a DIYer something like Vanguard's VBAL is worth looking at.
Reply With Quote
  #70  
Old 02-25-2021, 02:27 PM
mrcrossbow mrcrossbow is offline
 
Join Date: Mar 2013
Location: Cluny AB
Posts: 262
Default

Yes been reading every comment. Very helpful and have started looking at ETF's more In last few days. I started the thread for my self and any one else that might need advice but was to shy to ask. Hopefully it helps others also. Keep up the great advice and experiences and options. I really appreciate it, and I'm sure a few others do also.
__________________
Carpe Diem.
Reply With Quote
  #71  
Old 02-26-2021, 12:00 AM
nelsonob1's Avatar
nelsonob1 nelsonob1 is offline
 
Join Date: Jan 2012
Location: Nelson BC
Posts: 1,833
Default

If you have enough to invest, mobile home park, minimum of 35 units. Letterbox money, recession proof with a cap rate of 7%+
Reply With Quote
  #72  
Old 02-26-2021, 10:31 AM
KGB's Avatar
KGB KGB is offline
 
Join Date: Jan 2014
Location: Edmonton
Posts: 3,968
Default

Storage is even better.... Itís a license to print money.... But trying to find one for sale is a totally different story...
Reply With Quote
  #73  
Old 02-26-2021, 11:07 AM
elkhunter11 elkhunter11 is online now
 
Join Date: Dec 2008
Location: Camrose
Posts: 40,306
Default

If you max your RRSPs, and your TFSA, and set them up as self directed investment accounts, you can use the tax advantages, and still invest as you choose. And as long as you don't withdraw funds from the accounts, you can buy and sell with no tax implications.
__________________
Only accurate guns are interesting.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT -6. The time now is 01:37 PM.


Powered by vBulletin® Version 3.8.5
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.