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  1. #21
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    Excellent exercise for me to follow/check and I see your logic in terms of no one being able to predict and knowing what bottom is...thanks AltaRed!!


  2. #22
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    Quote Originally Posted by DPB View Post
    Sorry, was late and I don't think I made my confusion evident. There's a discrepancy between what I'm shown as a yearly return versus if I actually applied each % to the month. For example, if I started with 1000 and then applied each month as it came to that amount it'd end up at 1086.39. If I used the reported percent which just appears to be a sum of the year's returns the same 1000 would be 1077.40. Extrapolated to larger sums and this is quite a difference.
    Have you accounted for compound interest? I haven't done the math, but that probably accounts for the discrepancy. 77.40 would be simple interest paid yearly. Compound interest should yield more.
    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

  3. #23
    Senior Member indexxx's Avatar
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    I highly recommend that you read The Wealthy Barber Returns; it's aimed exactly at your questions and is a fun read as well. Make sure it's that (updated a few years ago) version and not his first Wealthy Barber. Any bookstore will have it, or the library if you can find it there. The extremely short gist of the book is go with low ME index funds or ETFs, start now, and keep piling into them until you retire. you'll drive yourself crazy waiting for a correction 'bottom'. What if everything swings up for another year and you haven't pulled the trigger- you'll have lost that entire year of growth. What about a monthly allocation strategy until your original principle is filly invested- 10% a month?
    "What good is money if you can't inspire terror in your fellow man?"- C.M. Burns

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  5. #24
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    Quote Originally Posted by DPB View Post
    Sorry, was late and I don't think I made my confusion evident. There's a discrepancy between what I'm shown as a yearly return versus if I actually applied each % to the month. For example, if I started with 1000 and then applied each month as it came to that amount it'd end up at 1086.39. If I used the reported percent which just appears to be a sum of the year's returns the same 1000 would be 1077.40. Extrapolated to larger sums and this is quite a difference.
    I did the math, and when I did exactly that, started with 1000 and applied each month's return to it in a row, I ended up with 1075.47, not 1086. Maybe re-do the math?

  6. #25
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    Just buy at slow pace until the 6 o'clock news opening storrie is 1000 , 2000 pt drop and every expert alive said they predicted. Buy Buy Buy. Which is a pt. if you 10k in you need to put 30k to avg down to that days drop.

  7. #26
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    Quote Originally Posted by Spudd View Post
    I did the math, and when I did exactly that, started with 1000 and applied each month's return to it in a row, I ended up with 1075.47, not 1086. Maybe re-do the math?
    My goodness, I feel like an idiot. I went by 0.9861 instead of 0.9761 on Feb. So yes in this case it would've ended up comparable. Although say a theoretical steady +5% growth each month. An addition answer, as it seems to use, would then yield 60% yearly compared to a compounding at 79.6%. I tried asking my financial adviser and he said it used the DVM monthly linking and IRR, without any explanation on the actual workings.

    I really appreciate the patience with me on this. I'm a total layman on this and I found myself with some extra free time this summer and so I want take the time to learn something new and important. Any beginner's reading you could suggest would be great as well.

  8. #27
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    Quote Originally Posted by indexxx View Post
    I highly recommend that you read The Wealthy Barber Returns; it's aimed exactly at your questions and is a fun read as well. Make sure it's that (updated a few years ago) version and not his first Wealthy Barber. Any bookstore will have it, or the library if you can find it there. The extremely short gist of the book is go with low ME index funds or ETFs, start now, and keep piling into them until you retire. you'll drive yourself crazy waiting for a correction 'bottom'. What if everything swings up for another year and you haven't pulled the trigger- you'll have lost that entire year of growth. What about a monthly allocation strategy until your original principle is filly invested- 10% a month?
    Thanks indexx for the recommended read! I see what you're saying and it's basically diversifying my buy price and spreading my risk of buying too high. Thanks oldroe also.

    I've really appreciated everyone's help on my thread and your understanding that there's so much info out there that it's overwhelming and one doesn't know what orgs/sites/advisors etc to trust so all of your impartial insights and recommends have been sincerely appreciated.

  9. #28
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    5. What is a realistic return to aim for an investor who doesn't want to actively trade but just wants to buy a handful max of mutual funds/ETFs? Is 10% too high an expectation?
    5 years is not an appropriate time frame for these kinds of investments. 10 years is probably the bare minimum time horizon, and more realistically should be 15 to 20 years minimum.

    Over a 15+ year time frame, for a balanced fund or portfolio of mixed stocks & bonds, I think you can probably see between 4% to 6% annual returns (my opinion).

  10. #29
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    Quote Originally Posted by james4beach View Post
    5 years is not an appropriate time frame for these kinds of investments. 10 years is probably the bare minimum time horizon, and more realistically should be 15 to 20 years minimum.

    Over a 15+ year time frame, for a balanced fund or portfolio of mixed stocks & bonds, I think you can probably see between 4% to 6% annual returns (my opinion).
    Awesome, thanks james4beach, that's perfect bc i'm the type of investor who wants to dump in their money and forget about it until retirement and have it grow to beat inflation and grow at least some so as not to kick oneself in terms of basic opportunity loss, so your input more aligns with my couchpotatoness lol.
    Last edited by sunshine88; 2017-05-19 at 10:12 AM.

  11. #30
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    Dump and pray is a very common investment strategy...explains why common returns are so poor. Never understood why people will spend hours following their favourite sports teams, tv shows, movies, etc. To the point where they can quote things line per line, pull out obscure facts, etc. Yet, when it comes to their financial stability, they don't want to spend any effort and just want to collect millions in the end.

    I'm not JustAGuy (without spaces), or Donald, or <insert name here>.

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