Poll

What the best ETF/Folio to compound 30years with minimum effort? (most likely to turn 10k into 200k or more)

NASDAQ TECH 100
1 (11.1%)
Vanguard Allworld VT
0 (0%)
Vanguard S&P 500
2 (22.2%)
Vanguard VTSAX
5 (55.6%)
Ray Dalio Allweather
0 (0%)
Other
1 (11.1%)

Total Members Voted: 9

Author Topic: The compounded family analysis - How to do a realistic forecast of top ETF's  (Read 956 times)

tim.peterson.1980

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Where to get real history or emulated performance data of S&P500, VTSAX, NASDAQ100, DALIO-ALLWEATHER?

I have found S&P500 thats very available but what about these others ETF's has been hard to find data that goes back to 1920. I have added it to below excel.
I have made an excel here with the S&P500 and an estimate what $10000 would compound to when invested from birth of age groups. Child, parent, grandparent. I would like to make this for the above ETF's if you can help our or explain how to add it to this excel. Also if i have compounded correctly. All dividends/return should get reinvested. I'm planning on investing 10-100.000 myself with focus on compounding, so i want to estimate what kind of result each type of ETF would give with real relatable numbers. The plan is to add the money and leave for 20-50years with minimum to no effort. So need to know it would really pay off. I know past performance does not equal future performance, but i do think ETFs can get you an idea what to expect over 10-20 years. It least that it's unlikely to loose money. I would like to test this with many data sets with reliable data, i know a few mistakes can have major impact on the final number.

Hope some professionals out there would be willing to help or can link to some similar research. I like the random age-groups and periods in this test that can give you more relate-able numbers instead of the typical ideal 80 year S&P scenario examples.

Main questions i would like to have real numbers and a conclusion on:

Is volatility and sometimes 50% losses of the S&P500 worse than a more stable allweather folio, when 20year compounding is the main focus?
Are a lower but more stable return better than higher more volatility return when longterm compounding?
Would adding money in recessions have major positive impact on performance?
I'm very inspired by:

https://jlcollinsnh.com
Anthony Robbins - Money master the game book with Ray Dalio.
In case it make you undestand better where i'm coming from. "Beginner passiv longterm index fund investing".

Excel: https://drive.google.com/file/d/1WAxFQd0-8LgOxHTvFvMH9tU-52ZyGtve/view?usp=sharing


ysette9

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What is your goal here?

If you want long term wealth building and you are either going to have a sustainable withdrawal rate or not withdraw anything at all then 100% stocks is the best way to go. I do all of my modeling using cfiresim. You won’t get the fidelity of the exact portfolios you are trying to model but you can adjust the stock/bond percentage to approximate more or less conservative asset allocations.

You’ll find that for maximum $ at the end of your time period that the most stocks always wins.

Naturally if you can time things well and put more $ in while the stock market is down then of course you will end up richer. The challenge is always 1) predicting when thing are down and 2) having spare cash to invest when the economy isn’t doing well.

tim.peterson.1980

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I wan't to focus on the power of compounding and reinvest all so lets say i'm 30 now i will have a fat pension when i'm 65. What is saw it that the s&p have some heavy drops of around 50% which would crush the compounding effect and i wonder if something like ray dalio's allwealtherm folio with lower perfromance but more stable returns would outperform because of the compounding effect and no heavy drops?

Many startegies does not have compounding and reinvest all as main focus, so find it hard to find some clear answers on this. In the end i'm looking for the strategy that has the highest output if you sell around around year 65-70 (in case you are in a recession you can't sell)

I would have enough money in other saving to live good this is just a way to try to make some 1-2million dollar on top with because of longterm thinking.
PS. I'm not good at running a business so that way i don't expect to get rich, but i do have a very high paying job and a frugal longterm mindset.

Cheers

ysette9

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I wan't to focus on the power of compounding and reinvest all so lets say i'm 30 now i will have a fat pension when i'm 65. What is saw it that the s&p have some heavy drops of around 50% which would crush the compounding effect and i wonder if something like ray dalio's allwealtherm folio with lower perfromance but more stable returns would outperform because of the compounding effect and no heavy drops?

Many startegies does not have compounding and reinvest all as main focus, so find it hard to find some clear answers on this. In the end i'm looking for the strategy that has the highest output if you sell around around year 65-70 (in case you are in a recession you can't sell)

I would have enough money in other saving to live good this is just a way to try to make some 1-2million dollar on top with because of longterm thinking.
PS. I'm not good at running a business so that way i don't expect to get rich, but i do have a very high paying job and a frugal longterm mindset.

Cheers
Again, please go spend some time playing around with various simulations on cfiresim. You’ll quickly see that yes, stocks take a beating from time to time, but they always come back eventually. If you stay invested then in the long long run, you always end up richer if you are heavy in stocks versus some other asset allocation. It might take 20 years, but stocks are the long term growth queen.

tim.peterson.1980

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I would like some transparent data with some real ETF's i can rely on. I can't trust a cfiresim generator with all my savings. To me this tool seems more like a toy than actual financial estimation. 
https://www.reddit.com/r/financialindependence/comments/7b0goa/what_happened_to_cfiresim/

ysette9

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I would like some transparent data with some real ETF's i can rely on. I can't trust a cfiresim generator with all my savings. To me this tool seems more like a toy than actual financial estimation. 
https://www.reddit.com/r/financialindependence/comments/7b0goa/what_happened_to_cfiresim/
I’m sorry but what? You can’t “trust cfiresim” with all of your savings? I don’t even know what that means.

It is simply a collection of real-world US stock and bond performance going back a hundred+ years. No more, no less. It can’t predict the future but you can get a reasonable idea of how the future may behave by studying everything it has ever done in the past.

If you don’t like that you can try McClung’s book Living Off Your Money, though it is designed with a difference audience in mind someone who is planning on living off their money, not just growing it for future generations. It is massively data-heavy though and spends a lot of time talking about the limitations of simulations and availability of past data.