my IRA has tripled and that is after I have taken out
my RMDs the last 3 years. My investments are fairly conservative about 50% equities and 50% fixed income.
I think I bonds are real bargain now paying 7.12% and exempt from state and local tax. The catch you can only invest $10000 a year and you have to hold them at least 1 year.

in interest. (That 7.12% rate is only good for 6 months, unfortunately, for Ibonds bought between Nov 1 and May 31 as I understand it, for anyone reading this, and the result of some unusual circumstances as I barely understand it ).

Here's a history of the rates --
http://kirklindstrom.com/Articles/I_Bond_Rate_History.html

Just picking the past 6 years (12 semi-annual rate periods), in chronological order from oldest to latest:

0.26%, 2.76%, 1.96%, 2.58%, 2.52%, 2.83%, 1.90%, 2.22%, 1.06%, 1.68%, 3.54%, 7.12%

pays 7.12%. I took the money out of my bank MM that paid next to nothing and you have to pay federal, state
and local tax on it. If you have $10000 that you can hold it is a good place to park it. Banks and MM funds haven't
paid anything for years.

While many an all time high is made in an uptrending market, there are investment books that take the long term perspective and advise caution. Individual stocks can outpace every type of investment if the growth is strong. But it is also the case that indexes are average. There were all time highs that preceded market tops - 1929, 1968, 1987, 2000, 2008, and the recession of 1973-75. These were significant market top events. Investing at a true market peak, is, as economist John Hussman often writes, an event that can take a decade, or two, to again attain the levels of that market top. Which means being underwater. Buying the dip is a frequent strategy, and one that works, but at small discounts to market peaks it can spell vulnerability. Market averages did not recover their previous highs following those market peaks for many years ... such as 1941, 1981, 1993, 2008.

Paying an inflated price is no way to buy a car, a house, or investments - if the intent is to make money. Timing is as important as the price paid.

I wrote. I was using the example I got as the worst case example of somebody picking the most unfortunate time to invest in recent decades, and where they end up now.

Yes, it can take decades sometimes to recover from some crashes

It took 25 years for the Dow to regain the peak before the 1929 crash,

It took 16 years for the Dow to get back to its 1966 high.

The S&P 500 didn't get back to its 1968 high until 1982 (14 years)

The Nikkei 225 was 38,916 12/29/89 close (it grew 6-fold during the 80's). Trough: 7,055 3/10/09 close, down 81.9%). It has made it above 30,000 recently but closed Dec 2 at 27,753. So that's way below its 12/29/89 high. After more than 31 years.

Some say the Nikkei doesn't apply to us because, you know, wink wink, they're different. Well at least since WWII they haven't elected an evil madman. Can't say the same about us.

There was a thread here about all that back in July 2020 --
https://www.democraticunderground.com/11212311

I should add, all of the above are just the price. With dividends included, the recovery times would have been shorter.

I am near 70 yo and about 55% equities 45% fixed income because I don't think I have 15+ years to get back to zero, so I get it. And that "+" on "15+" is very significant. It could be 20, 25, 30, 35.... years. I don't want to risk that either. Otherwise I'd be 100% equities.

The COVID bounce, due to all the liquidity added to the fuel. I cannot assume the landscape will be as robust going forward, in other words, the worst case scenario from investing in 2008 cannot be assumed to apply going forward now, we just don't know. Could be better, could be worse. I remember the 1970s, and while I was too young to understand what was going on financially, and the data made available now doesn't often go back that far, the market was struggling with lowered expectations and slower dividend growth. Those can whack the best hopes as we all know. Wage growth may mitigate that with higher spending, or make it worse with more inflation. It's a much different economy.

Vanguard, for example expects a 2.4%-4.3% annualized return on equities over the next decade (3.35% is the midpoint), and Schwab also has about the same forecast

Here's what Google served up on Vanguard, an October issue, there might be something later... but anyway

https://advisors.vanguard.com/insights/article/marketperspectivesoctober2021

because of very high valuations due to the factors you mention, and so interest rates suck on the alternative investment: bonds, CDs, etc. (in large part because of Federal Reserve QE action).

And no, we don't know the future, we could be at the beginning of a period for U.S. equities that make the Nikkei's experience look like a walk in the park.

And yes, the mid-60's to early 80's period was a long and difficult time for stocks. As were the 20's and 30's.

I remember "The Death Of Equities" Business Week Aug. 13, 1979 cover page all too well.

https://www.google.com/search?q=%22The+Death+Of+Equities%22+Business+Week&newwindow=1&sxsrf=AOaemvLcmFSTqtvwPL1Iqmo9CxsHyXtFWQ:1638495265819&source=lnms&tbm=isch&sa=X&ved=2ahUKEwjLz6PCvsb0AhXJVc0KHcqJAYUQ_AUoAnoECAEQBA&biw=1063&bih=605&dpr=1.1

For a longer term perspective, I Imgur'd this graph from Yahoo Finance at near the bottom of the Covid crash. I try hard to keep the longer term perspective in mind. Those were some mighty frightful crashes. The thing is, after several doublings, a 50% "crash" just gets rid of one of those doublings.



https://www.democraticunderground.com/10142452432#post14

They could mean reversals upward, or more downside ahead. I plan to average in here and there. I think it's easier with individual equities, but it can be done with sector etfs or mutual funds with particular emphasis. But that's me, I'm not a fan of index funds.

Hey, great discussion you sparked!

Why I chose VFINX is that I don't know anything equivalent for S&P 500 that includes dividends, not because I'm a fan of index funds.

And why I chose the S&P 500 is because it is cap-weighted average of 80-85% of the total U.S. market and is the one professionals use for benchmarking in general (almost never the Dow for good reason).

The ideal would be a total U.S. stock market index with dividends -- that would capture 100% of U.S. equities in market cap weighted (except for penny stocks and shrapnel like that). But I don't know where I can get that data that goes very far back (before about 1990) -- .

EDIT: anyway, every comparison I've done between the S&P 500 and the Wilshire 5000 Total Market Index is that they are very very close in performance.

I'm just trying to represent the U.S. equity market as a whole, and I don't know a better way.

I could always cherry-pick a stock or a sector fund that way beats the S&P 500, but it wasn't my goal to show how the best stock or fund would have performed. But rather my best shot that I know how of how the average investor in equities would have done had they bought at the most inopportune time in the recent 2 or 3 decades -- excepting the real recent stuff of the past few days.

I enjoy your almost daily commentary in the Economy Group's Stock Market Watch by the way.

Now a confession -- I am a fan of index funds, but that's not why I chose VFINX or the S&P 500. I am trying to broaden out however -- been trying to figure out what these people are doing:

"Closed End Funds - Open Discussion" (CEFOD) - https://www.facebook.com/groups/703483756914269

But I don't use Facebook, so that might be why.

Didn't know anyone read my commentary. Thanks. I put a lot of time into learning to read charts.

I have a watchlist, I make a few plays at a time. I have a crash list. I remember a few things I passed up or sold over the years from the 2009 lows. What was I thinking?

In a crash I reallly like covered call ETFs. There are not very many. Even fewer are index covered call writing funds. I shy from those that also carry REITS. A very few pay monthly dividends. All of them get beaten up like everything else. So I wait for the next great buying opportunity. My gurus say there's a good buying opportunity about every 18-24 months. Crashes of course less frequent, especially if from lofty heights.

almost nothing about selecting individual stocks or sectors, covered calls or puts or naked whatever or death crosses or any of that. My affinity for index funds is for the same reason that toothless people love applesauce.

You are way ahead of me. I'm just a buy and hold investor of a few index funds and a few active mutual funds.

The only reason I've been broadening out recently is because my fixed income stuff is so awful (Vanguard and Fidelity intermediate term mostly corporate bond open mutual funds with current yields of about 2.2%), that I really feel a strong need to do something. With most of my 45% of fixed income stuff in that stuff, getting an extra percent or two would make an enormous difference.

calguy's post in https://www.democraticunderground.com/11213049#post16 opened my eyes.

But I'm not ready to dive into closed end funds until I understand them better. I'm particularly concerned about how they will perform in a long-term secular interest-rate rising environment -- something we haven't had in more than 40 years.

and I should have used index funds, or the generic funds I was in decades ago, as part of my strategy!

A good covered call fund goes up and down with the market, and of course has dividends from its holdings. It also writes calls against what it owns, or against an index, and uses that inflow to increase dividends. Some are leveraged, some not. Some have REITS, which complicate capital gain reporting I think, and some not. Some payout principal as part of monthly payments. Once I've eliminated the levered, REITS, and principal payout, it's not a large universe. But they're not mutual funds in the sense of available from the big mutual fund companies, at least as far as I know. Some of those have call writing as an option, a notice in the prospectus, but it's not a primary techique they use often. (But how would we know? They'd have to tell us, or I'd really have to scour an annual report, and it's not my expertise.) So yeah closed end funds and ETFs is a thing for a brokerage account. They yield well, and when they plunge in a market panic, the yield goes way up, on paper, and they bounce back fast for that reason. That's when I want to pounce.

them and I've been reading the AAII Journal for decades (American Association of Individual Investors). Very little on CEFs -- saw a couple articles in the last couple years, I don't recall seeing any before that. They are big on asset allocations and factors investing (e.g. small cap, value, small cap value, whatevs).

returns that are well under half of the historical averages?