undefined | Better HN

0 pointsMagicWishMonkey11y ago0 comments

Vanguard Vanguard Vanguard.

Don't try to be clever. Just invest your money in a few different indexes and let it be.

Last year my account grew ~30%, it's increased 16.1% so far this year (the market isn't as crazy as it was in 2013 but it's not bad, either). You need to be disciplined enough to let your money sit and resist the temptation to do dumb things when the market dips.

It's not rocket science, the best way to fuck it all up is to try and manage your money yourself and play the market. Don't do that. There are thousands of bankers out there working 12-14 hours each day to take advantage of people who don't know what they are doing. Don't be a sucker.

0 comments

encoderer11y ago

Your 20 months of returns hardly make a compelling argument.

We are in the midst of a 3 year old bull market. We are just barely off all time highs in the S&P and Dow. Nasdaq is also killing it -- even after some pullback in high beta (volatility) stocks.

Your returns the last 2 years are not typical of an average year. A return approaching double digits over a long trendline is not beyond reach, but it would be a mistake to bank on a 12% return IMHO, and even more of one to suggest other people could expect the same.

There are tons of calculators where you can play with average returns over time, check one out.

MagicWishMonkeyOP11y ago

All of the vanguard funds have graphs charting the returns year over year since the fund was created.

The ones that crashed and burned in the recession are the ones most likely to provide a high return in a bull market, there are plenty that were largely unaffected by the recession (mostly securities) but you won't benefit as much from a bull market with those.

I have a blend of different funds.

encoderer11y ago

All ETFs and mutual funds have this, I believe it's SEC mandated. Regardless, your points may or may not be true but how something performs in a bull market isn't strictly the point. You need to average your returns over a long timeline.

There is nothing special about Vanguard ETFs, and even if you feel you are diversified there's an old saying that in a severe downturn the correlation of everything goes to 1. So most likely, in a downturn, everything you hold will go down, even if you feel you're diversified. This of course is not a law, just a probability.

(And just as a helpful FYI, both stocks and bonds are securities)

hnnewguy11y ago

>Last year my account grew ~30%, it's increased 16.1% so far this year

Everyone looks smart during a bull run-up. That same SPY allocation would have been crushed in 2008-2009. On average, you'll get average results.

The CAGR of SPY for the past 100 or so years is about 6.5%, inflation adjusted. Good, but not 30% good.

MagicWishMonkeyOP11y ago

I know the 30% return was an anomaly, but the 10 year returns on one of my funds is still in the ~10% range (even accounting for the recession), so I'm not really worried about it. It's better than a savings account, that's for sure.

j / k navigate · click thread line to collapse

0 comments

encoderer11y ago

Your 20 months of returns hardly make a compelling argument.

We are in the midst of a 3 year old bull market. We are just barely off all time highs in the S&P and Dow. Nasdaq is also killing it -- even after some pullback in high beta (volatility) stocks.

There are tons of calculators where you can play with average returns over time, check one out.

MagicWishMonkeyOP11y ago

All of the vanguard funds have graphs charting the returns year over year since the fund was created.

I have a blend of different funds.

encoderer11y ago

(And just as a helpful FYI, both stocks and bonds are securities)

hnnewguy11y ago

>Last year my account grew ~30%, it's increased 16.1% so far this year

Everyone looks smart during a bull run-up. That same SPY allocation would have been crushed in 2008-2009. On average, you'll get average results.

The CAGR of SPY for the past 100 or so years is about 6.5%, inflation adjusted. Good, but not 30% good.

MagicWishMonkeyOP11y ago

j / k navigate · click thread line to collapse