I don't believe the stock market is a stable or good place to invest (anymore).
I think the historic performance figures of the US stock market related to the unusually positive world position of the country after the last world war.
There was a baby boom, there was a space race, there was a 'cold war' and lots of planned spending and many tech advances.
I've seen an unending series of bubbles (and suspect they were happening even when I was a kid); the baby boomers looking for places to invest for a quick return, only to have their nest eggs smashed by the greedy sales people who (I at least hope) believed those were actually sound investments even though they should have known better.
Thus, I see the stock market as almost a casino; with odds rigged for the rich with not-quite insider trading.
My 'retirement plan' is to keep working, and to keep working, and to maybe live long enough that real socialism can happen after automation eats every job I don't want.
Yeah, history isn't on your side, nor is the future projected value of how corporations are accumulating wealth. If anything, buying shares of corporations who are doing a good job of accumulating capital has never looked better.
The major bubble is higher education, and real estate. But the latter is largely due to government meddling and the former... well, is also due to government meddling in part, but mostly this rapidly dissolving belief that college somehow churns out positive ROI for most attendees. This is becoming less and less true; it's only a matter of time before it collapses. It will happen in my lifetime easily, and I predict it will happen within two decades.
Historically the population has increased. The most likely outcomes of that which I foresee are a global resource war, pandemic, or pollution killing most of the population.
> I see the stock market as almost a casino; with odds rigged for the rich with not-quite insider trading.
The stock market is a casino if you want it to be one. And historical data shows that the odds are rigged in favor on the people investing consistently in diversified low-fee funds over a long period of time (decades) which is compliant with the timeline for preparing ones retirement.
The general trend is still upwards and the Bubbles don't change that.
Of course if you get in just before a bubble bursts, you lose at first and may have to wait a long time to break even. But judging from history (data since 1900) you will break even eventually.
I invest in 1000+ Euro batches in ETFs. By now I covered half of the world or more.
Nonetheless it is a bit frustrating to see ETFs bouncing up and down - everytime Mr Trump says something stupid you can expect the MSCI World to drop and with it everything else, too.
Even a globally diversified ETF seems to be indirectly highly US centric. The DJ drops - then also ETFs focusing on Asian EMs drop. It's a bit ridiculous.
And sometimes I am sceptical if the average market growth of up to 10% per year can be expected for the future.
>Nonetheless it is a bit frustrating to see ETFs bouncing up and down - everytime Mr Trump says something stupid you can expect the MSCI World to drop and with it everything else, too.
That is all part of it though. You shouldn't look at 1, 2 or 5 year yields. Look at 50 year yields. It will go up on average over all those years. Including crises like 2008.
You only die on a rollercoaster if you get off in the middle.
come one - 50 years? :D I'm beyond 30 - in 50 years I'm likely calling a little wooden box my home. So, let's say 20 to 30 years. That's the horizon I calculate with.
You are totally right with performance to be looked at for long periods of time. But I sometimes reflect on my ETF prices in relation to the news and I feel like there is a deeper and deepening fundamental issue with economy that might severely handicap my funds even on a long time scale.
Fair enough, but the point is that 5 tot 10 years is realtively short term. Imagine looking at the stock market from 2006 to 2011. Ouch!
But then 2011 until 2016 looks amazing! Wow!
There will always be up and downs. The trick is not to try and time them, just ride it out.
And don't forget to put a bigger percentage of your portfolio in bonds / safe things the older you get. You don't want to retire one year after the next '2008' and have everything in stocks.
as somebody who lived in one of those 'real' socialism of east europe behind iron curtain, I sure hope not. it twisted people and general mentality in unimaginable ways, and even though we have technically 28 years of democracy, this and next few generations are and will be f*cked up by the evil legacy of this period.
at the end it doesn't matter what type of system you want to retire in. numbers don't lie, and if there won't be enough young to cover your retirement, no system will magically provide you comfortable times. simple logic is, if you want to increase the odds of comfortable retirement, save for yourself, invest and be generally smart with money (thing I see extremely rarely among young).
and to be honest, I consider this correct by far the best and fair system. if one strives for monetary wealth in life, one should work hard and do life/education/career choices accordingly. it is perfectly OK to have other priorities in life, for many it might be the best path to happiness and fulfillment. but then bear the consequences of those choices and don't rely on others to throw cash on you for not doing your part earlier.
I think the historic performance figures of the US stock market related to the unusually positive world position of the country after the last world war.
There was a baby boom, there was a space race, there was a 'cold war' and lots of planned spending and many tech advances.
I've seen an unending series of bubbles (and suspect they were happening even when I was a kid); the baby boomers looking for places to invest for a quick return, only to have their nest eggs smashed by the greedy sales people who (I at least hope) believed those were actually sound investments even though they should have known better.
Thus, I see the stock market as almost a casino; with odds rigged for the rich with not-quite insider trading.
My 'retirement plan' is to keep working, and to keep working, and to maybe live long enough that real socialism can happen after automation eats every job I don't want.