My longterm portfolio is down 36.36%

Quote from neutrino:

You did a good thing 12 months ago but now you ask the wrong question. You shouldn't compare your portfolio return with the average investor return every year because your horizon is 30 years, not one year. You should look at your portfolio return vs the average return people made on their savings only after 30 years. That's the whole point. During that time people will jump in and out of the market AT EXACTLY THE WRONG TIME, and incur a lot of commission, trading or management costs, and you are virtually guaranteed to beat the "average". Meanwhile you should periodically, when you have money available, buy more stocks (or better yet, an ETF). And here is the catch - you should do this regularly and very disciplined - this will help you buy during moments of crisis (like now) where people get scared of stocks and sell them at bargain prices. But if you miss those wonderful and rare moments of extreme pessimism, and only buy when the sky is clear and everyone is positive, you will most likely underperform and you strategy will not work. And finally, and even most importantly, YOU SHOULD NEVER SELL until that 30 year period is over. The stock is a share of a company that makes money - if you sell it, you are no longer an owner of a business that makes you money, you only have cash that loses purchasing power over time.

Also, I think it might be a good idea to read some books about passive investing, so that you understand the difficulties of the process. There are only a couple of good books out there that will tell you everything you need to know.
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I think that was fine advice for the last 30 years but if you go read ed easterling's book you can see that there are historically protracted periods of time when the s&p produces NO real return over 20 years or so.

With average P/E ratios still in double digits and Tobin's Q somewhere near 1.0, its hard to persuade me that anyone can have the fortitude to DCA in a fixed amount (of any significance) for a decade or longer of flat yields, when regulatory changes might significantly impact the viability of that strategy (as it is frequently done in tax deferred 401k type investments).

While I've had some good luck this year buying distressed CEF's in panic sales back in the fall, I'm hardly 'all in'. I'll commit significantly at levels percieved to be a 'bottom' with more to be put in after that. But its hard to convince me with the above numbers, and what I see with my own eyes around me, that we are going nowhere but up from here.
 
Quote from KeithOmalley:

spot on. when people tell me there upset becuase there 401k are down so much they give me a look like im crazy when i tell them its the best thing possible. if your in the accumulation phase (these people are in there lower 30 and 20's) the best thing to happen is buying more at lower levels and selling later.

yes i understand that nobody knows if we are going lower but you just have to keep investing.

i never feel as i have an edge over anyone else in buying stocks in my PA for long term, so i just buy ultra low cost index funds and etf's mostly via vanguard
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In other words:

BUY BUY BUY

You and Stock tr3der should hook up.
 
Not too bad. Hedge funds did much worse and Bill Miller did worse, lots of mutual funds did worse.

Shows you that these "Star managers" are overpaid and overhyped.

Anyone can throw darts and get a few winners.


Madoff investors did even worse.

:)
 
Quote from drsteph:

I think that was fine advice for the last 30 years but if you go read ed easterling's book you can see that there are historically protracted periods of time when the s&p produces NO real return over 20 years or so.
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OK, let's say that you will have zero real return from stocks in the next 20 years (btw I couldn't find such 20 year periods without any real return provided that you did not buy at the top; there are however a couple of 10-year periods with flat real returns when you bought at bottoms). What's the alternative? What kind of investment can provide a positive REAL return in the next 20 years? Bonds, commodities, real estate, cash ? Even if stocks fail to increase your purchasing power for the next 10-20 years, is it better to keep your money in bonds or in the bank, where they will certainly lose purchasing power?
 
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