Author Topic: Investing if the Market Plummets 50%  (Read 2765 times)

heybro

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Investing if the Market Plummets 50%
« on: January 28, 2020, 01:44:51 PM »
If the market plummets 50% tomorrow, should I buy some more stock?

Or, is it better to have put that money in the year before even if it was more expensive at the time?

RWD

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Re: Investing if the Market Plummets 50%
« Reply #1 on: January 28, 2020, 01:53:51 PM »
The largest one-day drop of the SP500 was 20.47% so I assume you mean 50% over some short period of time. 50% in one day would be very concerning for non-financial reasons.

Of course it's always better to have bought stock at the cheapest price possible. The problem is you can't predict the future.

Villanelle

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Re: Investing if the Market Plummets 50%
« Reply #2 on: January 28, 2020, 02:01:12 PM »
If the market plummets 50% tomorrow, should I buy some more stock?

Or, is it better to have put that money in the year before even if it was more expensive at the time?[/b]


You should by stock according to your pre-determined plan.  If something in that plan triggers a buy tomorrow or next week, then you should continue to do it.  If it doesn't, you shouldn't.

As to whether it is better to pave put that money in a year ago, in theory, the depends on the specific numbers, including dividends.  But the expense of designing, building, and maintaining a time machine has to be subtracted from the increased gains.  Therefore, you can only look forward.

So, the answer is to come up with an investment plan (Personal Investing Statement, whatever) in a cold, unemotional way.  Then implement that plan with no regard for what the market did last week, last year, or yesterday, or with what you think you might know about what it will do tomorrow or next week or next year. 

It seems like most people agree that market-timing is ineffective and generally bad.  But they are unable to actually implement that when it comes to executing an actual plan. 

Telecaster

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Re: Investing if the Market Plummets 50%
« Reply #3 on: January 28, 2020, 02:27:58 PM »
The best time to invest is when you have available funds. 

soccerluvof4

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Re: Investing if the Market Plummets 50%
« Reply #4 on: January 28, 2020, 02:53:11 PM »
But sticking strictly to your scenario , one day would be scary for sure so I'd give it a few days/weeks and see what up and watch the market action and then for sure, anything not nailed down that you can sell and extra money etc.. and put in the market.

Monkey Uncle

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Re: Investing if the Market Plummets 50%
« Reply #5 on: January 28, 2020, 05:48:47 PM »
The best time to invest is when you have available funds.

Ding, ding, ding!  Right answer!

Gone Fishing

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Re: Investing if the Market Plummets 50%
« Reply #6 on: January 28, 2020, 06:10:05 PM »
The 2008 recession made me rich.  Didn't know it at the time.  Recessions are a beautiful thing for the accumulating investor as long as you don't get laid off!

norajean

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Re: Investing if the Market Plummets 50%
« Reply #7 on: January 28, 2020, 06:19:23 PM »
It all depends on why it dropped 50%. If it dropped because an asteroid hit Manhattan, then you might want to sell your remaining stock and buy gold.   Some drops (like recent ones) are short-lived. Others precede decades of terrible returns.

DK

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Re: Investing if the Market Plummets 50%
« Reply #8 on: January 28, 2020, 07:23:51 PM »
The 2008 recession made me rich.  Didn't know it at the time.  Recessions are a beautiful thing for the accumulating investor as long as you don't get laid off!

^this. didn't make me rich per se, but i'm so much further ahead since i increased my rate into my 401k during this time, when my coworkers were stop putting money in since 'it doesn't make sense to invest in something going down'.

more along the lines of the subject of this thread, i know i switched a chunk of  cashflow to pay down my mtg rather than invest, but if for some reason the market dropped 20+% i would switch back because of the likely very good long term results from money invested at that point.

MustacheAndaHalf

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Re: Investing if the Market Plummets 50%
« Reply #9 on: January 28, 2020, 08:11:46 PM »
If the market plummets 50% tomorrow, should I buy some more stock?
Or, is it better to have put that money in the year before even if it was more expensive at the time?
I don't think you realize how rare a -50% one day drop is...  has that ever happened in the US stock market?

Even the 2008 crisis unfolded over the course of a year or so.  The great depression had 3 really horrible years, and a long recovery.  Especially with modern regulations and technology, a one day -50% drop seems like a once in a 10,000 years or so event.  (Not impossible, but close to it)

Bloop Bloop

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Re: Investing if the Market Plummets 50%
« Reply #10 on: January 28, 2020, 08:24:39 PM »
The 2008 recession made me rich.  Didn't know it at the time.  Recessions are a beautiful thing for the accumulating investor as long as you don't get laid off!

This is why I wouldn't complain about a recession if it were to hit tomorrow.

reeshau

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Re: Investing if the Market Plummets 50%
« Reply #11 on: January 29, 2020, 02:21:27 AM »
It all depends on why it dropped 50%. If it dropped because an asteroid hit Manhattan, then you might want to sell your remaining stock and buy gold.   Some drops (like recent ones) are short-lived. Others precede decades of terrible returns.

Actually, no such thing--depending on your definition of "terrible."  But certainly, not decade"s".  And while the 00's were the "lost decade" for the S&P 500, they weren't anywhere close to that for someone who continued to invest through the period, or someone who invested in the broader market.

norajean

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Re: Investing if the Market Plummets 50%
« Reply #12 on: January 29, 2020, 04:15:28 AM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

UnleashHell

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Re: Investing if the Market Plummets 50%
« Reply #13 on: January 29, 2020, 04:21:40 AM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

and with the dividend? which was what 5 or 6 %?  enough to live on with the 4% rule or reinvest and beat those returns you are talking about,

reeshau

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Re: Investing if the Market Plummets 50%
« Reply #14 on: January 29, 2020, 05:20:18 AM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

and with the dividend? which was what 5 or 6 %?  enough to live on with the 4% rule or reinvest and beat those returns you are talking about,

@UnleashHell is right; see the next graph.  Dividends do matter.

@norajean, care to quote your sources?  I am afraid those may be fairly cherry-picked dates.  Are they Jan 1 or Dec 31, consistently?

I know I bought my first stock in Sept. 2000, and I have done much better than 3.8% CAGR.  (although I was investing inside my 401k from 1994)  Maybe I am an investing genius, and the only one to have done so.

norajean

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Re: Investing if the Market Plummets 50%
« Reply #15 on: January 29, 2020, 05:47:52 AM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

and with the dividend? which was what 5 or 6 %?  enough to live on with the 4% rule or reinvest and beat those returns you are talking about,

The quote includes dividends.

norajean

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Re: Investing if the Market Plummets 50%
« Reply #16 on: January 29, 2020, 05:50:50 AM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

and with the dividend? which was what 5 or 6 %?  enough to live on with the 4% rule or reinvest and beat those returns you are talking about,

@UnleashHell is right; see the next graph.  Dividends do matter.

@norajean, care to quote your sources?  I am afraid those may be fairly cherry-picked dates.  Are they Jan 1 or Dec 31, consistently?

I know I bought my first stock in Sept. 2000, and I have done much better than 3.8% CAGR.  (although I was investing inside my 401k from 1994)  Maybe I am an investing genius, and the only one to have done so.

Includes dividends. 

I'm always confused when people complain about quote of poor market performance being "cherry-picked". Those were the worst dates. That's the definition of "worst".  I could pick a random date but it wouldn't be worst.  To have avoided getting those returns you would need to "cherry pick" a date to sell our stocks and avoid the poor returns.  If you stay invested, you will hit all the good and bad days.  During the periods quoted, you would have seen some really crummy returns for decades, so don't imagine it can't happen.

beltim

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Re: Investing if the Market Plummets 50%
« Reply #17 on: January 29, 2020, 06:16:46 AM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

and with the dividend? which was what 5 or 6 %?  enough to live on with the 4% rule or reinvest and beat those returns you are talking about,

@UnleashHell is right; see the next graph.  Dividends do matter.

@norajean, care to quote your sources?  I am afraid those may be fairly cherry-picked dates.  Are they Jan 1 or Dec 31, consistently?

I know I bought my first stock in Sept. 2000, and I have done much better than 3.8% CAGR.  (although I was investing inside my 401k from 1994)  Maybe I am an investing genius, and the only one to have done so.

Includes dividends. 

I'm always confused when people complain about quote of poor market performance being "cherry-picked". Those were the worst dates. That's the definition of "worst".  I could pick a random date but it wouldn't be worst.  To have avoided getting those returns you would need to "cherry pick" a date to sell our stocks and avoid the poor returns.  If you stay invested, you will hit all the good and bad days.  During the periods quoted, you would have seen some really crummy returns for decades, so don't imagine it can't happen.

Where are you getting your data from?  A calculator at http://www.moneychimp.com/features/market_cagr.htm shows:
1900-1920: 6.12%
1928-1948: 4.86%
2000-2019: 6.01%

RWD

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Re: Investing if the Market Plummets 50%
« Reply #18 on: January 29, 2020, 06:33:04 AM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

and with the dividend? which was what 5 or 6 %?  enough to live on with the 4% rule or reinvest and beat those returns you are talking about,

@UnleashHell is right; see the next graph.  Dividends do matter.

@norajean, care to quote your sources?  I am afraid those may be fairly cherry-picked dates.  Are they Jan 1 or Dec 31, consistently?

I know I bought my first stock in Sept. 2000, and I have done much better than 3.8% CAGR.  (although I was investing inside my 401k from 1994)  Maybe I am an investing genius, and the only one to have done so.

Includes dividends. 

I'm always confused when people complain about quote of poor market performance being "cherry-picked". Those were the worst dates. That's the definition of "worst".  I could pick a random date but it wouldn't be worst.  To have avoided getting those returns you would need to "cherry pick" a date to sell our stocks and avoid the poor returns.  If you stay invested, you will hit all the good and bad days.  During the periods quoted, you would have seen some really crummy returns for decades, so don't imagine it can't happen.

Where are you getting your data from?  A calculator at http://www.moneychimp.com/features/market_cagr.htm shows:
1900-1920: 6.12%
1928-1948: 4.86%
2000-2019: 6.01%

Yeah, norajean's numbers are just plain wrong. From https://dqydj.com/sp-500-return-calculator/, annualized return with dividends reinvested:
1900-1920: 7.252%
1928-1948: 4.617%
1961-1981: 7.964%
2000-2020: 6.237%

I couldn't even get numbers as low as norajean when adjusting for inflation.

reeshau

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Re: Investing if the Market Plummets 50%
« Reply #19 on: January 29, 2020, 11:07:35 AM »

Includes dividends. 

I'm always confused when people complain about quote of poor market performance being "cherry-picked". Those were the worst dates. That's the definition of "worst".  I could pick a random date but it wouldn't be worst.  To have avoided getting those returns you would need to "cherry pick" a date to sell our stocks and avoid the poor returns.  If you stay invested, you will hit all the good and bad days.  During the periods quoted, you would have seen some really crummy returns for decades, so don't imagine it can't happen.

I view it another way:  the only way you could get investment performance that poor is if you invested all your money on that first day, and then withdrew it all on that last day.  Otherwise, *your* performance will be what the market is on the days you invest and withdraw.  Since people generally invest over their lifetimes (and so, DCA) and then withdraw over their retirement they tend toward the average / long term returns anyway, and won't "feel" these in the same way as the "world's worst market timer."

This is also why sequence of returns risk is a thing for your early retirement years.  If you *don't* hit it, then your accounts should be up, and should be beating inflation handily.  If you're up 30%, you don't care if you have a year down 20%; or, if you care, you aren't impacted because you are still up.  You can ride out the bumps.  Whether that's a big drop (as the OP asked about) or a slump period, it's the same mechanism.

I'm fine with talking highs and lows over years / decades / longer periods, but just like when you measure any statistic, you should pick your points in a consistent manner (12/31, or 1/1) in order to have credible data.  A peak-to-peak or peak-to-trough "statistic" is really an anecdote:  an outlier that exaggerates a point.  No different than if I claimed my stock performance from March 2009 to now:  that would be trough-to-peak.
« Last Edit: January 29, 2020, 11:09:28 AM by reeshau »

Laserjet3051

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Re: Investing if the Market Plummets 50%
« Reply #20 on: January 29, 2020, 11:11:08 AM »
If the market plummets 50% tomorrow, should I buy some more stock?
50%? I'd wait for it to drop 100%, then I'd think your safe.
Or, is it better to have put that money in the year before even if it was more expensive at the time?

ChpBstrd

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Re: Investing if the Market Plummets 50%
« Reply #21 on: January 29, 2020, 11:30:25 AM »
OP, could you restate the question? The way it’s phrased sounds like you are asking whether it would be better to buy before or after a 50% drop - which is of course obvious. Yet you’ve gathered an impressive array of answers to questions people think you are asking.

waltworks

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Re: Investing if the Market Plummets 50%
« Reply #22 on: January 29, 2020, 11:34:03 AM »
1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%

This is completely wrong.

1900-1920, annualized return was 7.2% with dividends reinvested.
From 1928-1948 it was 4.6%
1961-81 was 8%

You can run any scenario you want here: https://dqydj.com/sp-500-return-calculator/

Those are nominal returns, of course.

Where on earth did you get your numbers?

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seattlecyclone

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Re: Investing if the Market Plummets 50%
« Reply #23 on: January 29, 2020, 12:24:43 PM »
If the market plummets 50% tomorrow, should I buy some more stock?

Or, is it better to have put that money in the year before even if it was more expensive at the time?

In hindsight it's always better to have bought at the absolute lowest price you could. In this scenario that would mean waiting.

That said, we don't have crystal balls. What we do have is a lot of past data. It's quite rare for the market to drop 50% or more from any given moment. It could happen. It probably will happen in our lifetimes. Would I be terribly surprised the market dropped 50% lower than today's prices? Not really. Am I going to sell everything today, essentially betting that this kind of drop will happen? No way.

norajean

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Re: Investing if the Market Plummets 50%
« Reply #24 on: January 29, 2020, 12:58:24 PM »
Same calculator. I happened to use December.  With dividends and inflation.

https://dqydj.com/sp-500-return-calculator/

DarkandStormy

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Re: Investing if the Market Plummets 50%
« Reply #25 on: January 29, 2020, 01:10:19 PM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

And the 2000 retiree class - often recognized as one of, if not the worst year to retire/FIRE, at least post-Great Depression - is still doing fine if they stuck to their withdrawal rates.

PathtoFIRE

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Re: Investing if the Market Plummets 50%
« Reply #26 on: January 29, 2020, 01:23:21 PM »
I view it another way:  the only way you could get investment performance that poor is if you invested all your money on that first day, and then withdrew it all on that last day. 

Technically, if you pick that day to retire, with the intention of not earning any additional money to add to your stash at a later point, then this would be the equivalent of investing all that you had on that particular day. Obviously your path to that point will include both dollars saved and earning on that savings, but you would be locked in to whatever the future path is.

RWD

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Re: Investing if the Market Plummets 50%
« Reply #27 on: January 29, 2020, 01:27:47 PM »
The S&P CAGR for the last two "decades" between 2000 and 2019 was 3.8% which fits my definition of terrible.  Want more?

1900-1920 returned a meager 0.5%. 
1928-48 1.6%.
1961-81 0.8%
Same calculator. I happened to use December.  With dividends and inflation.

https://dqydj.com/sp-500-return-calculator/

Using those parameters I get 4.5% for 2000-2019, not 3.8%. That's a respectable real return, certainly not "terrible" (average has been only ~7%).  I will be thrilled if we get 4.5% real returns for the next 20 years. I was able to successfully reproduce your other three periods' returns. Now that I know they are real returns and not nominal they don't seem worth the doom and gloom (none of them lost money even after considering inflation). The worst 20 year period of all time was -0.219% annualized return after inflation.

I think a lot of the confusion came from you using the term CAGR which implies nominal returns, not real returns.

norajean

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Re: Investing if the Market Plummets 50%
« Reply #28 on: January 29, 2020, 02:38:58 PM »
CAGR is CAGR. It can be nominal or real.

RWD

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Re: Investing if the Market Plummets 50%
« Reply #29 on: January 29, 2020, 02:46:02 PM »
CAGR is CAGR. It can be nominal or real.

CAGR is the growth rate required for an investment to hit a given balance. I couldn't find anything in a quick search suggesting it could be used for an inflation adjusted balance, but maybe you could point me to a source for that? At the very least inflation-adjusted is not going to be the default assumption.

waltworks

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Re: Investing if the Market Plummets 50%
« Reply #30 on: January 29, 2020, 02:51:12 PM »
Yeah, those numbers are not scary at all. Worst case *including inflation* you didn't even lose money? FFS.

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dougules

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Re: Investing if the Market Plummets 50%
« Reply #31 on: January 29, 2020, 03:53:51 PM »
I feel the need to quote @RWD 's running tally of people posting to call the timing of the next crash.  For reference today's close was 3273.  At some point posters like these will get lucky and be right, but most of most of them will have been waiting a long time.  Meanwhile inflation keeps creeping, and businesses keep reinvesting their earnings.   

Everybody knows the bull market in the 1990s was a bubble.  It was already very high by 1997, but if you'd pulled out then you would so far have never had an opportunity to buy in at a price that would beat the person who had just closed their eyes and rode it out.  I think the market is high, too, but I'm not going to try and guess whether 2020 is a repeat of 1997 or of 1999. 

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9/2019 [2978]
https://forum.mrmoneymustache.com/investor-alley/recession-in-2-ish-years-scale-and-nature/
10/2019 [2986]
https://forum.mrmoneymustache.com/investor-alley/advice-needed-108726/
11/2019 [3110]
https://forum.mrmoneymustache.com/investor-alley/questions-from-37yr-old-that-very-recently-became-serious-about-fi/
https://forum.mrmoneymustache.com/investor-alley/where-to-invest-my-cash-now/
12/2019 [3169]
https://forum.mrmoneymustache.com/ask-a-mustachian/help!-i-dont-know-where-to-start/
https://forum.mrmoneymustache.com/investor-alley/the-old-excuses-for-down-swings-and-a-reality-yet-we-are-at-all-time-highs!/
1/2020 [3296]
https://forum.mrmoneymustache.com/investor-alley/what-to-do-with-a-large-sum-of-money-bad-time-to-buy-index-funds/

Miscellaneous
https://forum.mrmoneymustache.com/investor-alley/%27but-right-now-the-market-is-at-an-all-time-high-%27/
https://forum.mrmoneymustache.com/investor-alley/the-great-market-crash-of-2016!/
https://forum.mrmoneymustache.com/investor-alley/how-to-deal-with-losing-$117k-in-stock-market/
https://forum.mrmoneymustache.com/investor-alley/anyone-else-feeling-depressed-about-global-equities-10-year-outlook/
https://forum.mrmoneymustache.com/investor-alley/stocks-will-only-return-4-annually-for-next-decade-john-bogle/

reeshau

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Re: Investing if the Market Plummets 50%
« Reply #32 on: January 29, 2020, 04:54:57 PM »
I view it another way:  the only way you could get investment performance that poor is if you invested all your money on that first day, and then withdrew it all on that last day. 

Technically, if you pick that day to retire, with the intention of not earning any additional money to add to your stash at a later point, then this would be the equivalent of investing all that you had on that particular day. Obviously your path to that point will include both dollars saved and earning on that savings, but you would be locked in to whatever the future path is.

Half true.  You may pick that day to retire, but you aren't picking the end of the period to die.  You would have to hit the high *and* the low to realize worst case.  Your returns will still be better, as anyone here is planning on a retirement horizon much longer than 10 years, and 20 year periods look even better.  What you *do* get, though, is the manifestation of Sequence of Returns risk.

PDXTabs

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Re: Investing if the Market Plummets 50%
« Reply #33 on: January 29, 2020, 05:17:32 PM »
CAGR is CAGR. It can be nominal or real.

CAGR is the growth rate required for an investment to hit a given balance. I couldn't find anything in a quick search suggesting it could be used for an inflation adjusted balance, but maybe you could point me to a source for that? At the very least inflation-adjusted is not going to be the default assumption.

I'm with norajean on this. Actual or normalized values may be used for calculation as long as they retain the same mathematical proportion. - Wikipedia

RWD

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Re: Investing if the Market Plummets 50%
« Reply #34 on: January 29, 2020, 05:43:01 PM »
CAGR is CAGR. It can be nominal or real.

CAGR is the growth rate required for an investment to hit a given balance. I couldn't find anything in a quick search suggesting it could be used for an inflation adjusted balance, but maybe you could point me to a source for that? At the very least inflation-adjusted is not going to be the default assumption.

I'm with norajean on this. Actual or normalized values may be used for calculation as long as they retain the same mathematical proportion. - Wikipedia

Doesn't normalized in this context mean "per period" not "adjusted for inflation?"

Quote
CAGR/Return per Period – The percentage gained as a compound annual growth rate or CAGR (‘per period’ normalized growth)

CAGR or compound annual growth rate is a normalized measure of your investment’s performance. Since money invested in one place is not invested elsewhere, CAGR is a fair way to compare two investments by the rate they return gains quoted as an average gain or loss per year.
https://dqydj.com/return-on-investment-calculator/

PDXTabs

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Re: Investing if the Market Plummets 50%
« Reply #35 on: January 29, 2020, 05:47:01 PM »
I'm with norajean on this. Actual or normalized values may be used for calculation as long as they retain the same mathematical proportion. - Wikipedia

Doesn't normalized in this context mean "per period" not "adjusted for inflation?"

Maybe, but don't inflation adjusted dollars maintain their mathematical proportions?

Monerexia

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Re: Investing if the Market Plummets 50%
« Reply #36 on: January 29, 2020, 05:51:30 PM »
If the market plummets 50% tomorrow, should I buy some more stock?

Or, is it better to have put that money in the year before even if it was more expensive at the time?

Thorstach, do you have a chart for this?

Buffaloski Boris

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Re: Investing if the Market Plummets 50%
« Reply #37 on: January 29, 2020, 05:52:11 PM »
A 50% drop? Like next week? I should be so unfortunate. Although in truth I doubt markets would be operating in such a drastic scenario.

If it were to happen, I’d spend a moment of sorrow for those who were hurt. And then I’d be buying as quickly as I could.

RWD

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Re: Investing if the Market Plummets 50%
« Reply #38 on: January 29, 2020, 05:58:04 PM »
I'm with norajean on this. Actual or normalized values may be used for calculation as long as they retain the same mathematical proportion. - Wikipedia

Doesn't normalized in this context mean "per period" not "adjusted for inflation?"

Maybe, but don't inflation adjusted dollars maintain their mathematical proportions?

It seems to me that adjusting for inflation is specifically changing the mathematical proportion, but there isn't any more text describing what they mean and there is no source cited so I'm not sure. The only other places I could find reference to the mathematical proportion were obviously just copy/pasting from Wikipedia.

maizefolk

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Re: Investing if the Market Plummets 50%
« Reply #39 on: January 29, 2020, 06:01:15 PM »
If the market plummets 50% tomorrow, should I buy some more stock?
Or, is it better to have put that money in the year before even if it was more expensive at the time?
I don't think you realize how rare a -50% one day drop is...  has that ever happened in the US stock market?

Even the 2008 crisis unfolded over the course of a year or so.  The great depression had 3 really horrible years, and a long recovery.  Especially with modern regulations and technology, a one day -50% drop seems like a once in a 10,000 years or so event.  (Not impossible, but close to it)

In principle it shouldn't be possible to have a -50% drop in the market in a single day because there are automatic circuit breakers that kick in. 7 and 13% drops each trigger a 15 minute halt in trading, and a 20% drop closes the markets for the rest of the day. So the fastest we could get a 50% drop would be four days.

Day one 20% drop: 20% cumulative
Day two 20% of 80% (new starting value) drop: 36% cumulative drop
Day three 20% of 64% (new starting value) drop: 48.2% cumulative drop
Day four up to 20% of 51.8% (new starting value) drop: >50% cumulative drop.

harvestbook

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Re: Investing if the Market Plummets 50%
« Reply #40 on: February 01, 2020, 06:46:08 AM »
It would all depend on the reason for the drop.
Neither capitalism nor the human race will last forever.