13 years to break even if you invested in April 2000

Jul 3 81 Comments

I know the whole “don’t try to time the market” shtick but to those still investing, are you prepared to psychologically be in the red for 12+ years?

S&p in April 2000 - 1.5k
S&p in April 2013 - 1.5k
s&p now - 3k (????)

Like I honestly don’t understand how anyone can continue to invest in the stock market given this historic bull run and overly inflated stocks.

Personally I’m holding 90% cash (bonds for 401k), 10% crypto. Once the fire sale happens I’ll be able to happy to have extra dry powder

What’s everyone else’s asset allocation?

TC: 210k
NW: 110k

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TOP 81 Comments
  • Facebook osek
    WTF is OP smoking? I want to try some??

    Rule 1: never invest all your money at 1 trade. Always be in the market and do dollar cost average. Buy when it's high and buy when it's low (buy more at low).
    Jul 3 8
    • OP
      If the market goes up another 80% before we see a major correction we’ll have bigger problems on our hands
      Jul 3
    • Amazon i9ju7u
      When you put money in your 401k and you buy index funds, you are buying these stocks. So you are buying them.
      Jul 3
    • OP
      It’s all in bonds.
      Jul 3
    • Amazon i9ju7u
      But most people put their money in S&P 500 funds, you see my point?
      Jul 4
    • OP
      Most people are fcking morons
      Jul 4
  • New Cutlass
    OP is a giant dumb who does not know that SPX returns dividends. This causes him to post flame bait suggesting the S&P500 returned nothing from April 2000 to April 2013. It actually went up 36% and returned 2.5% annually with reinvested dividends. The whole thread is clickbait.

    OP is exposed as a fraud, what will he do?
    Jul 3 6
    • New Cutlass
      OP tries to avoid the issue that he doesn’t understand what he’s taking about.

      And now IBM is trying to convince me dividends are “zero gain until you sell”. Amazing insight. Zero gains means I don’t need to pay taxes on dividends, right IBM? Tell that to the IRS!

      Everyone can learn from IBM, whose share price is inflated by financial manipulation and debt funded buybacks.
      Jul 3
    • New Cutlass
      IBM, I’m glad you’ve read investing for dummies and are able to retain its contents. Blind is a great place to flex you can read. Thanks for your insights!
      Jul 3
    • eBay eyxitsjtj
      @op- please enlighten us with those “other safer investment vehicle” at that time.
      Jul 3
    • Microsoft TAIp46
      Beanie babies
      Jul 3
    • Nextdoor / Product recess
      Cutlass’s comments are becoming a bit too played out.

      What will he do next? Change his name? His persona? Or get gender reassignment surgery?

      Find out next!
      Jul 3
  • Susquehanna International / Eng Kristaps11
    “Why are all of you dumping money into overvalued assets that are at an all time high and are propped up by speculation and not proven profitability?!”

    -> puts all assets into cash and crypto

    lol
    Jul 3 5
    • Susquehanna International / Eng Kristaps11
      You literally just handwaved a bunch of numbers to make your arithmetic work out.

      I’ve transacted more money in bitcoin than OP’s current net worth. Trust me if anyone can see the actual real world value of crypto I can.

      Edit:
      This dude edited his post from a 50% market drop to 30% lul
      Jul 3
    • Susquehanna International / Eng Kristaps11
      The price of bitcoin will be whatever the Chinese farmers decide it’ll be. I don’t give a shit about the price as long as fees are low enough and transactions are fast enough.

      As for what the theoretical true dollar value of btc should be, all you need to do is look left, look right, and see who’s actually transacting bitcoin for regular use and in what volume. After you do that and realize basically next to no one actually uses any significant amount of bitcoin except for a few drug dealers and poker players (which is still nothing), go ahead and look at the market cap of btc now which is currently half of Austria’s GDP.

      Hopefully you’ll come to realize the current dollar valuation of bitcoin is just a number in the clouds propped up by mostly whales in China with some sprinkling of degenerate hodlers.

      One can hope but I’m sure you won’t be swayed because moon lambos.
      Jul 3
    • Susquehanna International / Eng Kristaps11
      Btc is only a store of value philosophically if you’re a hodler who’s deluded yourself into thinking it’s a valid investment. Store of values only have value if they’re backed by an underlying asset or system of trust. Bitcoin isn’t pinned and blockchain is a consensus protocol and thus antitrust. Bitcoin from a technical design perspective was never built to be a store of value and it still isn’t heading in that direction.

      If we’re all unfortunate enough to be part of the worldwide economic collapse I’ll look forward to hodlers trying to cash in their bitcoin for any good or commodity without any transaction infra.

      Also LMAO @ using short horizon charts to “predict” the long term value of an asset for the most volatile instrument in history that doesn’t actually product any value or provide any real world function. There’s a reason crypto is a HFT’s wet dream if only the exchanges weren’t so shitty.
      Jul 3
    • LinkedIn
      tendies

      LinkedIn

      BIO
      sex work, quantum computing, and crypto HFT
      tendiesmore
      How are the exchanges shitty? There's more than ten thousand bots trading right now on bitmex alone and I'm sure plenty of those are run by HFT companies.
      Jul 3
    • Susquehanna International / Eng Kristaps11
      @linkedin
      Inconsistent physical infra, inconsistent/shitty tech support, inconsistent message specs, some exchanges tried messing with websockets. A lot of things the established fiat exchanges guarantee which make for a more transparent and safer environment for hft just aren’t there yet in the crypto exchanges. That said they’re relatively new and getting better.

      We trade on the exchanges because there’s money to be made but that doesn’t mean they don’t suck.
      Jul 3
  • Google bc89
    The person who invested right before the crash and continued to invest through it would have done well. I don't recommend anyone try to time the market. Just keep investing slowly but surely with each paycheck with a reducing risk exposure as you near retirement and the timing of crashes along the way doesn't matter.
    Jul 3 6
    • Google bc89
      You wouldn't be in the red for 13 years. You would continue to invest through the crash, lowering your cost basis.
      Jul 3
    • Google bc89
      Many people believe they can time the market, but extremely few can (largely because future expectations are priced in). If you believe you can time the market and want to roll the dice, that's your choice.
      Jul 3
    • OP
      Very few people would have the stomach to continue to invest after having 60% of their portfolio decimated
      Jul 3
    • Google ovBk62
      You don't get it OP. The point is that you don't invest 100k and forget about it. You invest over time using dca. If market is red, you are buying stocks at lower prices. When market recovers you'd have made money
      Jul 3
    • OP
      @ibm 40 years ago S&p was $100.

      Today it is $3000 (24T market cap). That is 30x growth.

      For that to occur today, S&p would need to go to $90,000 (720T market cap) by 2060

      How the fck would that even happen? Especially when we’re trying to curb climate change?
      Jul 3
  • Travelzoo deetcode
    Bold strategy, Cotton. We'll see if it pays off.
    Jul 3 3
    • OP
      For my own sanity I’m avoiding equities. I couldn’t sleep at night knowing I own such overvalued stocks
      Jul 3
    • Travelzoo deetcode
      No, I getchu. I follow a momentum based model that had me exit equities a few times over the past years. There are a couple of possible triggers. Iran, Brexit, trade deals blowing up...
      Jul 3
    • OP
      Plenty of unknown unknowns as well. I suppose only time will tell. Will be interesting to see how the fed responses given they’re out of tricks to pull (other than negative interest rates which would be insane)
      Jul 3
  • Google / Eng
    sqrt(-1)

    Google Eng

    BIO
    Top Contributor or GTFO
    sqrt(-1)more
    Jul 3 5
    • OP
      Literally the stupidest anecdote ever. I hate when this thing gets posted.

      40 years ago S&p was $100.

      Today it is $3000 (24T market cap). That is 30x growth.

      For the same Bob situation to occur, S&p would need to go to $90,000 (720T market cap) by 2060

      How the fck would that even happen? Especially when we’re trying to curb climate change?
      Jul 4
    • Google / Eng
      sqrt(-1)

      Google Eng

      BIO
      Top Contributor or GTFO
      sqrt(-1)more
      I think you have exquisite math skills.
      Jul 4
    • OP
      You’re delusional if you think we can continue this exponential growth (most of which was a result of exploiting the environment or developing nations)
      Jul 4
    • Google / Eng
      sqrt(-1)

      Google Eng

      BIO
      Top Contributor or GTFO
      sqrt(-1)more
      The example in the text doesn't require or explore exponential growth.
      Jul 4
    • OP
      You think 30x return in 40 years isn’t exponential?

      Bob invested in the 1970s when s&p500 was sub $100. This is a different world.
      Jul 4
  • Amazon New Guy!
    Doesn't matter if you dollar cost average in the market. Also, you are not including dividends, which are part of the total return.

    My point is you can cherry pick dates, but sequence of return risk never works this way
    Jul 3 10
    • Amazon New Guy!
      You clearly don't understand economics.
      Jul 4
    • OP
      Macro Economics is a pseudo science filled with frauds
      Jul 4
    • Amazon New Guy!
      Doesn't matter if you're goal is to do good.
      Jul 4
    • OP
      What does that even mean?
      Jul 4
    • Amazon New Guy!
      Just invest and don't look back. If you do, enjoy your mediocre returns. I'
      Jul 4
  • Goldman Sachs fake engineer
    The Fed can make the "fair" PE ratio go up with rate cuts and QE...

    I regret mostly sitting out on stocks while QE was still going. That should have been a no brainer.

    Now though, I'm loaded up on SPX puts, gold, and crypto lol. Hoping it makes up for the gains I missed out on. There's still some stocks that are cheap though, but I am too greedy and want to pick them up when they're on sale.
    Jul 3 1
    • Amazon catowayne
      When you make a mistake and then not only double down, but triple down on your mistake with puts and gold 🙈🔮🙈🤔
      Jul 4
  • eBay eyxitsjtj
    @op- You don’t understand how time, dollar cost averaging, and most importantly, compounding works. If you claim that you do then you definitely don’t. BTW where is your cash lying - bank of america, chase, wells fargo, or somewhere else?
    Jul 3 6
    • OP
      You also don’t understand buying at the end of a historic bull run where assets are ridiculously inflated is a fools errand.
      Jul 3
    • Google bc89
      How do you know when the end is? If you have a method to determine that, you could make us all rich.
      https://images.app.goo.gl/kQ6XmqsaB73HHMGW8
      Jul 3
    • OP
      It’s basic probability. The probability of a 11 year bull market is less than a 10 year market which is less than....

      Given the odds, why would you bet against them?
      Jul 3
    • eBay eyxitsjtj
      If you don’t need your money in 10 years then this shouldn’t be a topic for you to worry. However, if you are near retirement (age 50+) then you’d better move your assets in conservation vehicles like Annuities or IULs.

      The chart shows growth of initial 100k AND monthly dollar cost averaging of $500 since april 2000. Look beyond the 13 year time frame and how compounding suddenly doubles the money in 6 years in the bull run following the bear market.

      This chart doesn’t consider dividend reinvestments.
      Jul 3
    • OP
      40 years ago S&p was $100.

      Today it is $3000 (24T market cap). That is 30x growth.

      For that to occur today, S&p would need to go to $90,000 (720T market cap) by 2060

      How the fck would that even happen? Especially when we’re trying to curb climate change?
      Jul 4
  • Google bc89
    Example of this logic: Imagine if you sold in 2013 because the S&P was approximately at the previous highs from 2000 and 2008. You would miss 6 years of dividends, and all the returns since 2013. Basic timing heuristics don't work because everyone else has that information. The methods that truly outperform the market are extremely limited, and usually rely on high frequency trading capabilities no individual investor has (ex: pay co-location fees to a stock exchange to have the fastest opportunity to arbitrage inefficiencies in the market from mis priced commodities across exchanges). If you figure out a way to do that without paying the fees that the hedge funds pay, or you find some information that nobody else / very few others know about, then you have a real edge and should never share that with strangers.
    Jul 3 3
    • OP
      Yes but 2013 wasn’t the longest bull market in history, with an inverted yield curve and massively overpriced equities with record high price to earnings ratios
      Jul 3
    • Susquehanna International / Eng Kristaps11
      On average even HFTs don’t reallyyyy beat the market. We just have better / more granular visibility on market conditions that allow us to capitalize on +EV moves when the going is good. This provides easier scaling than low frequency strategies without exposing yourself to a lot more risk.

      But if you look at the annual returns of Virtu or one of the European firms you’ll see we don’t do much better if at all from a straight roi pov.
      Jul 3
    • Amazon crypto*
      What an ignorant comment from Google. "Methods that truly outperform the market are only HFT based". Classic information of misinformation among general public. There are people doing non hft work and beating the markets.
      Jul 4
  • Microsoft UseDeFeet
    When it drops, double down.
    Jul 3 1
    • OP
      Yes I’m waiting for the drop. Deploying any capital into equities now would be beyond stupid
      Jul 3
  • Taylor Farms azerty_
    Has anyone thought that the current president would do everything he can not to let the market crash before the elections next year?
    Jul 3 1
    • Apple I45dw9df
      Come campaign time if it’s looking like trump might lose, there’s a good chance that the market will drop. My guess is that if he wins it will shoot back up but if he loses it will either stay down or maybe drop more.
      Jul 3
  • Valassis / Mgmt
    GNu002

    Valassis Mgmt

    PRE
    Microsoft
    GNu002more
    I don't disagree with the idea that we're heading to a correction. But if you really believe you can time it you should be in $SQQQ contracts.
    Jul 3 1
    • OP
      I don’t think I can time it. I just know investing now would be absolutely ludicrous.
      Jul 3
  • Microsoft / Product
    Brazuka

    Microsoft Product

    PRE
    Bain & Company
    Brazukamore
    NW 110k?? do whatever with that pocket change.
    Jul 3 0
  • PayPal trump2024
    Dollar cost averaging, people. Works like a charm.
    Jul 3 2
    • Microsoft / Product
      Brazuka

      Microsoft Product

      PRE
      Bain & Company
      Brazukamore
      Myth. Best to invest immediately.
      Jul 4
    • Amazon catowayne
      Depends on your goals. Reducing variance/risk -> dollar cost avg. Max theoretical yield -> invest immediately. Dollar cost avg is usually better for risk-adjusted return and sortino ratio.
      Jul 4
  • SAP / Strategy
    TC525

    SAP Strategy

    PRE
    SAP
    TC525more
    The point is to see a correction or crash as a discount. What would you have done in Aug-2000? 110k NW is nothing to fret over. Put that in perspective how much you need at 65ish.
    Jul 3 1
  • Facebook AttentionI
    I stopped reading after "10% in crypto"
    Jul 4 0
  • Amazon catowayne
    ITT: Economic 🔮 that will be looked on poorly in hindsight. See threads in Oct->Dec
    Jul 3 0
  • Google NSFW4
    Mm this posts makes me wish I haven't raised cash. When everyone thinks the crash is imminent that's when we charge higher ...
    Jul 4 1
    • Goldman Sachs fake engineer
      Almost no one on this thread thinks the crash is imminent though...

      It really depends on whether the Fed cuts according to market expectations.
      Jul 4
  • Amazon / Product TheStreets
    I'm about to deploy a put strategy as the continuous growth is making me leery.

    I have made fantastic gains and am looking to keep those versus assuming things will magically keep growing at unheard of rates ..... Yield curve is a warning sign.

    Take the sell off and put it into my money market and pay bills off the interest.

    Keep some losses in the market to balance out for taxes.
    Jul 3 1