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Total return by asset for last 200 years
- Thread starter uranium
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The main issue with this strategy is that we (except a couple of demigods on this forum) don't have forever time.
If you bought the S&P500 in 1929, you've had to wait until 1985 to break even, 56 years! So be mindful of that given the insanity of the markets these days.
You are incorrect
1929: 24.86
1952: 24.19
23 years
What was the world economic crisis from 1929 to 1933?
Great Depression, worldwide economic downturn that began in 1929 and lasted until about 1939. It was the longest and most severe depression ever experienced by the industrialized Western world, sparking fundamental changes in economic institutions, macroeconomic policy, and economic theory
1939-1945: world war 2
Indeed the nominal value of the DJIA (there was no S&P 500 in 1929) took 25 years to reach again its peak of 381.17 of 3 Sep 1929. However, if we consider dividends and adjustments for inflation, it took only 4.5 years from the 1932 low.
Anyway, you can’t really compare the stock market of the early 20th century with the stock market of today. Back then the total number of stocks traded in the US was around 1500, today it’s 7500. There were no derivatives on stock indexes. Etc. It was a totally different world.
Curio: none of the companies that were part of the DJIA in 1929 are still in the DJIA today.
The S&P 500 was created in 1957.
Anyway, you can’t really compare the stock market of the early 20th century with the stock market of today. Back then the total number of stocks traded in the US was around 1500, today it’s 7500. There were no derivatives on stock indexes. Etc. It was a totally different world.
Curio: none of the companies that were part of the DJIA in 1929 are still in the DJIA today.
The S&P 500 was created in 1957.
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The history of the S&P 500 dates back to 1923, when Standard and Poor's introduced an index covering 233 companies. The index as it is known today was introduced in 1957, when it was expanded to include 500 companies.
Indeed very professional, are you doing all this as an private investor or are you owning a fund, investment company etc. ?Yeah that's why i created them, basically you have to f**k around with Bloomberg Terminal/OpenBB /Tradingview etc to generate the charts and you can only have so many open at once and it resets and you actually just need this in the bg routinely updating twice a day or once a day / week etc
So we did something like 200 different areas we look at to get our leading indications constantly updating.
Will do a UX for them next so can have all on one screen and popup in sequential order (larger) randomly.
Otherwise you can't see the woods for the trees, so bring the woods to the forefront
We are a AI company - had a treasury melting so had to figure out how to deal with - our treasury was then managed in house.
Pretty simple - follow liquidity cycles (debasement) which drives business cycles (ISM) and as its debasement via refinance cycles you can plot forward future business cycles around the refinance cycles and liquidity cycles - from there you can plot assets direct or P/Es etc and indices.
It doesn’t need to be 100% accurate you just need to outpace debasement + inflation + tax anything above that is wealth accumulation - anything on par is wealth retention, anything below is forward wealth lower than current wealth.
35mins onwards...
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My point is, buy&hold investing can be a great strategy for a young person, but it's not easy to follow.
If you bought the S&P500 at the end of 1999, you've had to wait until approximately 2014 to break even. How many people have the stomach to wait for 14 years? Not easy sticking to it.
I prefer to trade the market (I trade futures), but we also know how difficult it is timing the market.
Interactive chart of the S&P 500 stock market index since 1927. Historical data is inflation-adjusted using the headline CPI and each data point represents the month-end closing value.
Vast majority of traders eventually blow up - math supports that position.... best to just DCA over time, or macro invest...
That's where DCA gets more interesting. Instead of investing a lump sum end of 1999, divide your capital and DCA over a couple of years hence averaging down your cost per share. Break-even point will come way quicker in case of long bear market.
Granted that for genuine astrologists and other immortals lump sum investing wins hands down.
Unfortunately that's so true.
A lot of people get into trading thinking they will get rich very quickly, and that's how they blow up.
Trading is a marathon, not a sprint race, risk management is everything (I never risk more than 1%~2% of my capital. If a trade is losing I get out, no ifs or buts). It took me a few years to be consistent.
I would stay away from day trading.
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Haven’t looked at the US but see this and say up - rarely take much notice of the UK seeing as it’s insignificant and merely a US satellite these days. (National anthem needs to change).
Anyway -> that’s pure debt monetization needed via balance sheet signs if ever there was one - from colonial era to current… if it ain’t printing 50% a year in $ invested in the UK I wouldn’t touch it - yeesh
Anyway -> that’s pure debt monetization needed via balance sheet signs if ever there was one - from colonial era to current… if it ain’t printing 50% a year in $ invested in the UK I wouldn’t touch it - yeesh
That's why you buy in 1930
But even if you bought in 1929, keep in mind that dividends were higher at that time (4-5% and even reaching 7% some years). Between 1970 and 1990 dividends from SP500 were 4%. A History of the S&P 500 Dividend Yield.
So even in that situation of "lost decades" a holder would have kept collecting substantial income, which depending on the volume could have been used to live off dividends and/or to keep reinvesting.
Please explain me thisThat's why you buy in 1930
But even if you bought in 1929, keep in mind that dividends were higher at that time (4-5% and even reaching 7% some years). Between 1970 and 1990 dividends from SP500 were 4%. A History of the S&P 500 Dividend Yield.
So even in that situation of "lost decades" a holder would have kept collecting substantial income, which depending on the volume could have been used to live off dividends and/or to keep reinvesting.
Imagine I invested 1 million in s&p500, i collect 1.35% dividends and right after the price falls by 50%, so I'm worth 500k. How much dividends I get in $ ?
Don’t think you need to worry about stock market crashes unless you are in individual stocks opposed to positions in indices.
This is because of the debasement process requires collateral and the private side of refinancing holds indices which generates the wealth multiplier for the absorbing of Government debt which can then be hypothecated as mixed collateral for additional loans on the Eurodollar market and the Fed bond banks.
Hence they’ve stepped in every time since 2008 to bail it out by injecting liquidity - as recent as 2023 when the SME Banks started collapsing from holding Gov debt and lending out to SMEs and commercial real estate - hence the FHLB - originally established to aid retail buy property during the Great Depression was used to take the banks collateral which was under water as pristine in exchange for a 12m loan to the paper value not Market to Market, then followed on by the BFTP.
Basically the market can not be allowed to collapse because it wipes out the liquidity and bonds are dumped below market creating a giant sucking sound for liquidity which then dominos from banks to central banks.
Then consider the structural changes with the fact that wealth is consolidated demographic wise with the boomers range if they get wiped out it not only wipes them out but the entire system to rebuild from.
So no financial repression via currency debasement nominal appreciation and continuous print the difference to inject liquidity to keep the process going has been the way and will continue to be the way - debts never repaid but rebased lower in real terms and yield offset by juicing GDP or printing the difference for the interests.
Think of the US as Germany in 1920s the boomers of that era bought bonds because it was safe, the youth bought stocks - the boomers were wiped out - the youth absorbed the wealth.
That’s the state we are in - you just need to choose the right horse and ensure it’s not a donkey masquerading as a horse.
Short term stock market crashes routinely recover *
Check weekly reserves v Fed New Liquidity Injections -> draw a line at 300b$ and observe the counter liquidity injections every time reserves go below 300b$ or just before - they are countering because that leads to a banking crisis.
You can and have seen in the past where they bought stock even though they are not meant to to hold the markets up (believe it was Apple stock)
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My average return is 10%~30% over the course of a year (I've had a couple of years with a 50%~60% return, but that was just the luck of the Irish).
My winning rate goes from 40% to 60% (you can still be profitable with a 30%~40% winning rate).
My maximum drawdown has been 10%, but generally is around 5%~6%
My longest losing streak has been 4 months in a row. Not easy sitting in front of the computer for 4 months losing money non-stop.
The key is risk management (lose a little, lose a little,... you win a lot type of thing), and staying faithful to your system no matter what.
Basically, you have to become a robot, and leave your emotions aside.
I started trading in 1999, right before the Tech bubble. Before that I was a long-term invertor.
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