Author Topic: VTSAX 13%+ gain YTD  (Read 18535 times)

HawkeyeNFO

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Re: VTSAX 13%+ gain YTD
« Reply #100 on: January 04, 2018, 01:11:28 PM »
How many years in a row does the market have to climb ~20% before people stop fearing the next market correction? 

The past nine years have been a modern economic miracle.  Whatever little hiccups come next seems likely to be inconsequential in comparison. 

Like at this point I feel we could mostly shrug off the type of 40% correction that has always previously sparked serious discussion about the end of capitalism and collapse of western society.  Go ahead, take me back to 2015 valuations.  No biggie.
If people are selling appreciating assets because they are in fear, there is always a buyer willing to deal with them. 

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #101 on: January 04, 2018, 02:44:40 PM »
How many years in a row does the market have to climb ~20% before people stop fearing the next market correction? 

The past nine years have been a modern economic miracle.  Whatever little hiccups come next seems likely to be inconsequential in comparison. 

Like at this point I feel we could mostly shrug off the type of 40% correction that has always previously sparked serious discussion about the end of capitalism and collapse of western society.  Go ahead, take me back to 2015 valuations.  No biggie.
If people are selling appreciating assets because they are in fear, there is always a buyer willing to deal with them.

@sol exactly dont have to really "sell for a loss" which everyone always fear mongers about when they talk of paying down a mortgage instead of investing.
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BTDretire

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Re: VTSAX 13%+ gain YTD
« Reply #102 on: January 04, 2018, 03:06:51 PM »
How many years in a row does the market have to climb ~20% before people stop fearing the next market correction? 

The past nine years have been a modern economic miracle.  Whatever little hiccups come next seems likely to be inconsequential in comparison. 

Like at this point I feel we could mostly shrug off the type of 40% correction that has always previously sparked serious discussion about the end of capitalism and collapse of western society.  Go ahead, take me back to 2015 valuations.  No biggie.
If people are selling appreciating assets because they are in fear, there is always a buyer willing to deal with them.

 I'm not selling, but I'm also uncomfortable with all the talking heads so positive about the market, we have lost the wall of worry that the market uses as a ladder to climb.

HawkeyeNFO

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Re: VTSAX 13%+ gain YTD
« Reply #103 on: January 04, 2018, 05:21:36 PM »
BTD, there are still plenty of doomsday "experts" predicting bad things very soon in the "overvalued" stock market.  There are believers in both the bear and the bull.

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #104 on: January 04, 2018, 06:02:19 PM »
The only market that will 100% crash in the short term is Bitcoin. Glad MMM finally did a write-up on that gross waste of energy and soon to be people's money.
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WhiteTrashCash

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Re: VTSAX 13%+ gain YTD
« Reply #105 on: January 04, 2018, 09:42:32 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

drunkenNoodles

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Re: VTSAX 13%+ gain YTD
« Reply #106 on: January 06, 2018, 06:56:05 AM »
Guys.  All this talk of hoping for a correction so one can buy cheaper is wrong thinking on many levels.  I would discourage it.

Yup. So many examples of people sitting on the sidelines in fear have been posted on this forum in 2016...some for years. The most liberating thing I've learned about investing is that I cannot predict the future so just invest my money in broad market index funds and get on with working on parts of my FIRE plan that I can control like savings/spending and staying healthy so I can actually take advantage of the free time I'm working towards when I do FIRE.


This is why I love MMM. Reminds me of the basics and keeps me focused. Thanks!

Bateaux

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Re: VTSAX 13%+ gain YTD
« Reply #107 on: January 06, 2018, 11:44:45 AM »
The only market that will 100% crash in the short term is Bitcoin. Glad MMM finally did a write-up on that gross waste of energy and soon to be people's money.

There will be more 30, 40 maybe 50% corrections in the stock market.  Diversified portfolios that are properly minded will survive.  Crypto currency without a government backing will eventually be restrained and most will collapse. I made a few bucks playing with coins last year.  I took profits and now hold cash in USD.  What made crypto so popular was the lure of almost free money and lack of any regulations.   Its popularity will bring regulations and standards. 
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BTDretire

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Re: VTSAX 13%+ gain YTD
« Reply #108 on: January 06, 2018, 12:03:40 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

WhiteTrashCash

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Re: VTSAX 13%+ gain YTD
« Reply #109 on: January 06, 2018, 02:48:34 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.

BTDretire

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Re: VTSAX 13%+ gain YTD
« Reply #110 on: January 06, 2018, 07:22:30 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.
Awe come on White, I've been investing 35 yrs, it took me two years, but after that, I learned to pick the exact low to buy and the exact high to sell. I think I'll right a book on "How to Time the Market". Nah, with all the money I have made timing the market, I should just have it printed and give it away!  :-)

WhiteTrashCash

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Re: VTSAX 13%+ gain YTD
« Reply #111 on: January 06, 2018, 07:31:47 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.
Awe come on White, I've been investing 35 yrs, it took me two years, but after that, I learned to pick the exact low to buy and the exact high to sell. I think I'll right a book on "How to Time the Market". Nah, with all the money I have made timing the market, I should just have it printed and give it away!  :-)

By Pete, you have committed heresy! It is forbidden on MMM to time the markets. Your penance is to read John Bogle's "The Clash of Cultures: Investment vs. Speculation" three times.

Zamboni

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Re: VTSAX 13%+ gain YTD
« Reply #112 on: January 06, 2018, 07:57:28 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.
Awe come on White, I've been investing 35 yrs, it took me two years, but after that, I learned to pick the exact low to buy and the exact high to sell. I think I'll right a book on "How to Time the Market". Nah, with all the money I have made timing the market, I should just have it printed and give it away!  :-)

Please give it away, because everyone deserves a copy of any book you right.

BTDretire

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Re: VTSAX 13%+ gain YTD
« Reply #113 on: January 07, 2018, 11:11:07 AM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.
Awe come on White, I've been investing 35 yrs, it took me two years, but after that, I learned to pick the exact low to buy and the exact high to sell. I think I'll right a book on "How to Time the Market". Nah, with all the money I have made timing the market, I should just have it printed and give it away!  :-)

Please give it away, because everyone deserves a copy of any book you right.

 I hope everyone realizes my first line,
" That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)"
 was a facitious statement, then I expanded on that, when I got a somewhat serious warning about timing the market.
 I held on through 2008 and 09, to a loss of $230k, I don't time the market.

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #114 on: January 07, 2018, 11:41:58 AM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.
Awe come on White, I've been investing 35 yrs, it took me two years, but after that, I learned to pick the exact low to buy and the exact high to sell. I think I'll right a book on "How to Time the Market". Nah, with all the money I have made timing the market, I should just have it printed and give it away!  :-)

Please give it away, because everyone deserves a copy of any book you right.

 I hope everyone realizes my first line,
" That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)"
 was a facitious statement, then I expanded on that, when I got a somewhat serious warning about timing the market.
 I held on through 2008 and 09, to a loss of $230k, I don't time the market.

It was quite obvious. IMO. But if you do figure out how to time the market and RIGHT a book I'd like to know how to do both. Unless we're just talking about setting up a book vertically that's got the info to time the market. 
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WhiteTrashCash

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Re: VTSAX 13%+ gain YTD
« Reply #115 on: January 07, 2018, 08:05:25 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.
Awe come on White, I've been investing 35 yrs, it took me two years, but after that, I learned to pick the exact low to buy and the exact high to sell. I think I'll right a book on "How to Time the Market". Nah, with all the money I have made timing the market, I should just have it printed and give it away!  :-)

Please give it away, because everyone deserves a copy of any book you right.

 I hope everyone realizes my first line,
" That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)"
 was a facitious statement, then I expanded on that, when I got a somewhat serious warning about timing the market.
 I held on through 2008 and 09, to a loss of $230k, I don't time the market.

Jeez, someone thought I was somewhat serious about something. I'm losing my edge.

BTDretire

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Re: VTSAX 13%+ gain YTD
« Reply #116 on: January 07, 2018, 08:37:48 PM »
The answer is always "buy" until you FIRE and then the answer is always "sell 4% each year." Period.

 That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)

Don't try to time the markets. That's like feeding a mogwai after midnight. The consequences are dire.
Awe come on White, I've been investing 35 yrs, it took me two years, but after that, I learned to pick the exact low to buy and the exact high to sell. I think I'll right a book on "How to Time the Market". Nah, with all the money I have made timing the market, I should just have it printed and give it away!  :-)

Please give it away, because everyone deserves a copy of any book you right.

 I hope everyone realizes my first line,
" That's only if you can't figure out how to sell at the top and buy at the bottom. ;-)"
 was a facitious statement, then I expanded on that, when I got a somewhat serious warning about timing the market.
 I held on through 2008 and 09, to a loss of $230k, I don't time the market.

It was quite obvious. IMO. But if you do figure out how to time the market and RIGHT a book I'd like to know how to do both. Unless we're just talking about setting up a book vertically that's got the info to time the market.
I'm losing it too, I didn't figure out what you meant here, until I reread my post, where I
rote right instead of write. :-)

COEE

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Re: VTSAX 13%+ gain YTD
« Reply #117 on: January 07, 2018, 11:36:40 PM »
There will be more 30, 40 maybe 50% corrections in the stock market. 

I sincerely hope that the dips are that shallow.  People these days don't remember The Great Depression.  Stock market lost about 90% of its valuation over a 2.5 year period and took 25 years to see the same market value before the crash.

This is a graph I've been pondering for a while and wondering what I'd do if I saw a crash like this.  This graph makes all of the other corrections seem like child play - mostly because they have been.
https://virtueofselfishinvesting.s3.amazonaws.com/uploads/reports/2017/4675/history_of_market_corrections2-hires.png?link=mktw

Considering most here need ~1M for themselves and their lives (with a spouse)... if this were to happen immediately after FIRE you are for sure going back to work.  You're 4% SWR will only get you 4k/year or 2.5 years if you pull the 40k out each year.  That cash flow won't last a 25 year depression in our environment.  I can live with flat times, even transient dips (on a 5ish year time period - which the vast majority of dips are), but shit man - a 25 year drought might ruin me.  I really hope I never see it, but I do acknowledge The Great Depression as the worst case scenario.

As someone else has already pointed out though is that even if the market did correct to 2500 points (can you imagine!!!?!?!?!) that everyone would still have their equity.  It would become very important to hold onto as much of it as possible if this happened.  Getting a job for another 25 years would for sure be the ultimate goal to try to hold on, but it could be very difficult to secure employment if that happened.

I remember my grandfather not wanting to talk about the depression it was so bad.

Edit to change the photo to a link - it's so large (pixel-wise) that it doesn't format well.

Bateaux

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Re: VTSAX 13%+ gain YTD
« Reply #118 on: January 08, 2018, 12:24:06 AM »
There will be more 30, 40 maybe 50% corrections in the stock market. 

I sincerely hope that the dips are that shallow.  People these days don't remember The Great Depression.  Stock market lost about 90% of its valuation over a 2.5 year period and took 25 years to see the same market value before the crash.

This is a graph I've been pondering for a while and wondering what I'd do if I saw a crash like this.  This graph makes all of the other corrections seem like child play - mostly because they have been.
https://virtueofselfishinvesting.s3.amazonaws.com/uploads/reports/2017/4675/history_of_market_corrections2-hires.png?link=mktw

Considering most here need ~1M for themselves and their lives (with a spouse)... if this were to happen immediately after FIRE you are for sure going back to work.  You're 4% SWR will only get you 4k/year or 2.5 years if you pull the 40k out each year.  That cash flow won't last a 25 year depression in our environment.  I can live with flat times, even transient dips (on a 5ish year time period - which the vast majority of dips are), but shit man - a 25 year drought might ruin me.  I really hope I never see it, but I do acknowledge The Great Depression as the worst case scenario.

As someone else has already pointed out though is that even if the market did correct to 2500 points (can you imagine!!!?!?!?!) that everyone would still have their equity.  It would become very important to hold onto as much of it as possible if this happened.  Getting a job for another 25 years would for sure be the ultimate goal to try to hold on, but it could be very difficult to secure employment if that happened.

I remember my grandfather not wanting to talk about the depression it was so bad.

Edit to change the photo to a link - it's so large (pixel-wise) that it doesn't format well.

I hope we never see losses beyond 50% again.  I don't think many jobs will survive that level of dip again.  Global war may very well break out if it does now.  There could be a push to eliminate people in such a case and war is highly effective at that. 
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FireInspired

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Re: VTSAX 13%+ gain YTD
« Reply #119 on: January 08, 2018, 12:28:15 AM »
There will be more 30, 40 maybe 50% corrections in the stock market. 

I sincerely hope that the dips are that shallow.  People these days don't remember The Great Depression.  Stock market lost about 90% of its valuation over a 2.5 year period and took 25 years to see the same market value before the crash.

This is a graph I've been pondering for a while and wondering what I'd do if I saw a crash like this.  This graph makes all of the other corrections seem like child play - mostly because they have been.
https://virtueofselfishinvesting.s3.amazonaws.com/uploads/reports/2017/4675/history_of_market_corrections2-hires.png?link=mktw

Considering most here need ~1M for themselves and their lives (with a spouse)... if this were to happen immediately after FIRE you are for sure going back to work.  You're 4% SWR will only get you 4k/year or 2.5 years if you pull the 40k out each year.  That cash flow won't last a 25 year depression in our environment.  I can live with flat times, even transient dips (on a 5ish year time period - which the vast majority of dips are), but shit man - a 25 year drought might ruin me.  I really hope I never see it, but I do acknowledge The Great Depression as the worst case scenario.

As someone else has already pointed out though is that even if the market did correct to 2500 points (can you imagine!!!?!?!?!) that everyone would still have their equity.  It would become very important to hold onto as much of it as possible if this happened.  Getting a job for another 25 years would for sure be the ultimate goal to try to hold on, but it could be very difficult to secure employment if that happened.

I remember my grandfather not wanting to talk about the depression it was so bad.

Edit to change the photo to a link - it's so large (pixel-wise) that it doesn't format well.

You are missing some very important details related to the depression.  The main one is dividends.  It took only 4.5 years after the bottom to break even with dividends, which would be 7 years from the peak if you went all-in in 1929.  The market dividend yield at the bottom was 14%. There was also 18% deflation which made everything cheaper reducing your needed withdraw rate.

Certainly still a very tough economic time,  but not as bad as the 25 years you fear.  It should be survivable with mustachian adjustments or a more conservative asset allocation than 100% stocks.

boarder42

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Re: VTSAX 13%+ gain YTD
« Reply #120 on: January 08, 2018, 04:30:27 AM »
Yes the depression is a bad choice for worst case scenario. Worst case in history was 1966 and the few years around that due to hyperinflation.  And even in both those cases sticking to a 4% swr the retirees money still lasted over 20 years and with some minor flexibility it would have lasted forever. By minor flexibility I mean being able to adjust your spending down by 15% or a bit less for a few years or finding some odd jobs to supplement that 15%
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CanuckExpat

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Re: VTSAX 13%+ gain YTD
« Reply #121 on: January 13, 2018, 02:15:15 PM »
Here is more complete data for 2016 taken from https://www.portfoliovisualizer.com/historical-asset-class-returns:

Inflation                       2.04%

US Stock Market                 12.53%
US Large Cap                    11.82%
US Large Cap Value              16.75%
US Large Cap Growth             5.99%
US Mid Cap                      11.07%
US Mid Cap Value                15.11%
US Mid Cap Growth               6.62%
US Small Cap                    18.17%
US Small Cap Value              24.65%
US Small Cap Growth             10.61%
US Micro Cap                    21.47%

Intl Stock Market               4.65%
Developed Markets               2.45%
International Small Cap         4.17%
International Value             5.05%
European Stocks                 -0.80%
Pacific Stocks                  5.19%
Emerging Markets                11.55%

Cash                            0.20%
Short Term Treasury             1.09%
Intermediate Term Treasury      1.19%
10-year Treasury                1.00%
Long Term Treasury              1.21%
Total Bond Market               2.50%
TIPS                            4.52%
Global Bonds (Unhedged)         4.02%
Global Bonds (USD Hedged)       6.07%
Short-Term Investment Grade     2.75%
Corporate Bonds                 6.21%
Long-Term Corporate Bonds       7.83%
High Yield Corporate Bonds      11.21%
Short-Term Tax-Exempt           0.36%
Intermediate-Term Tax-Exempt    0.09%
Long-Term Tax-Exempt            0.62%

REIT                            8.34%
Gold                            8.03%
Precious Metals                 50.64%
Commodities                     10.12%


Same data for 2017:

Inflation                       2.11%

US Stock Market                 21.05%
US Large Cap                    21.67%
US Large Cap Value              16.99%
US Large Cap Growth             27.65%
US Mid Cap                      19.12%
US Mid Cap Value                16.91%
US Mid Cap Growth               21.72%
US Small Cap                    16.10%
US Small Cap Value              11.67%
US Small Cap Growth             21.78%
US Micro Cap                    12.47%

Intl Stock Market               27.33%
Developed Markets               26.40%
International Small Cap         30.12%
International Value             21.25%
European Stocks                 26.82%
Pacific Stocks                  28.39%
Emerging Markets                31.11%

Cash                            0.80%
Short Term Treasury             0.31%
Intermediate Term Treasury      1.59%
10-year Treasury                2.39%
Long Term Treasury              8.60%
Total Bond Market               3.45%
TIPS                            2.81%
Global Bonds (Unhedged)         9.45%
Global Bonds (USD Hedged)       4.42%
Short-Term Investment Grade     2.13%
Corporate Bonds                 7.06%
Long-Term Corporate Bonds       11.96%
High Yield Corporate Bonds      7.03%
Short-Term Tax-Exempt           1.00%
Intermediate-Term Tax-Exempt    4.55%
Long-Term Tax-Exempt            6.44%

REIT                            4.83%
Gold                            12.81%
Precious Metals                 13.75%
Commodities                     3.89%

Interesting to see reversals in outperformance from year to year (small vs large, growth vs value)