Tariffs...what to make of them.

Patrick said:
fairly sure I just asserted 2-3 doubling cycles in 40 years. that is sub 7%.
SP500 is also at 5740, not 6150 - or 7% less than peak.
BUT
It is also only 130pts less than it was on 1/1/2025 - down 2%, we can handle 2% down over 40ish trading days?
With most of it coming yesterday!

Assuming this calc is correct - https://www.buyupside.com/calculators/annualizedreturn.htm

Looking at number from 5 years ago then 2972 3/6/2020. 5740 - 3/6/2025,
is 14% per annum - high from a market average perspective - but is 5 years a reliable average?
Really high if working with the peak of 6150.
But we can avoid that short term, irrational exuberance.

3/6/2015 - 2071, or 11% per annum for 10 year - more reasonable

I got in around 1990ish, think it was around 600 - comes out around 7% over 35 years - which means it doubles every 10 years (rule of 72).

this does not include the 1.5%ish dividend that the sp500 throws off. That is not in the averages.

Don't let the size of the numbers mess with ya. It is geometric, not linear.
Use a log-linear (log of price, linear time) to get a better feel for the growth rate.

What do your moving averages say?

why is it so volatile?
Simple answer: Uncertainty. The cost of risk.

sp500 log-linear - seems like a trend? i'm good with that.

View attachment 256816

I'll do another post on protection of principal in the retirement thread.
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It went from 666 in march of 09 to 6150 in January of 25. What's that rate of return? It has over tripled in 15years.
 
Dave Taylor said:
So just pick numbers that work?
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I invested about the same amount that March as I did in the previous march, and the march after.

That is why I don't hold money on the side waiting for a buying opportunity, and I don't pull money cause the market is tanking

Maybe it is a lesson?
Market tanks 25% or more, sell the farm and get in.
 
Patrick said:
You picked the lowest point after the 2008 disaster?
Don't cherry pick.
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Patrick said:
I invested about the same amount that March as I did in the previous march, and the march after.

That is why I don't hold money on the side waiting for a buying opportunity, and I don't pull money cause the market is tanking

Maybe it is a lesson?
Market tanks 25% or more, sell the farm and get in.
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Or simply wait for pullbacks. 60/40 rule works well too. I do this with TQQQ where avg return is 36%. Invest 60% initially, check back 3 months later. If you are over 9%(1/4 of yearly gain) take the percentage you are over 9% out. If you are under 9% add the percentage lower back in. Rinse/repeat every 3 months. Can keep in cash or stable value fund.
 
Patrick said:
I invested about the same amount that March as I did in the previous march, and the march after.

That is why I don't hold money on the side waiting for a buying opportunity, and I don't pull money cause the market is tanking

Maybe it is a lesson?
Market tanks 25% or more, sell the farm and get in.
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I get your point. My point with where we are is that during 1980-2000 or so avg return was 11%. Avg return between 2000-2010 was -.5%. It's great on paper if you have years and years but when the avg is much higher than the norm which it currently is then I'll play my cards and have some cash on the sides for a dip. I still have some invested. Would be silly to take it all out. I don't recommend this for someone that doesn't manage their own money. I started adding back in yesterday and I'll probably be back in by the end of march. Another reason I did this was the uncertainty of the whackos in the Whitehouse. They specifically talk about undoing what has been done the last15 years.
 
Dave Taylor said:
I get your point. My point with where we are is that during 1980-2000 or so avg return was 11%. Avg return between 2000-2010 was -.5%. It's great on paper if you have years and years but when the avg is much higher than the norm which it currently is then I'll play my cards and have some cash on the sides for a dip. I still have some invested. Would be silly to take it all out. I don't recommend this for someone that doesn't manage their own money. I started adding back in yesterday and I'll probably be back in by the end of march. Another reason I did this was the uncertainty of the whackos in the Whitehouse. They specifically talk about undoing what has been done the last15 years.
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This just popped up on FB.

Image 5.jpeg
 
wonder how i would have done if i missed the 10/20/60 worst days?

Dave Taylor said:
Correct, but the 60/40really helps with dollar cost averaging
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time makes up for the stability of bond returns.
although I did/do partake of VWEAX as a portion of my portfolio....

also VNJUX for tax free in the post-tax account. I decided i'd rather pay tax on 9% than no tax on 2.5% - so that moved this year.
 
shrpshtr325 said:
What's your threshold for rich? Just for reference sake
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enough to start coasting.
different for everyone.

scott62 said:
More than million annual income. The tariffs are just another tool Putin is having trump use to reach his goals. That is an America alone weakened and fighting its self. I honestly don’t understand how people can’t see that trump is doing everything Putin wants.
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This is silly - annual income has nothing to do with it, except for the fact you can accumulate wealth faster.

My definition more concisely: can you not work and be cash flow positive in the lifestyle you've become accustom?

next up is generational wealth - do your kids only have to work to manage the money you left them?
in my case he'll get something - he won't be able to coast.
 
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