S&P500 at record highs - time to stay in or pull out?
Discussion
Inlineonline said:
NowWatchThisDrive said:
Inlineonline said:
And again who here has genuinely beaten a global all caps index fund consistently over at least 10 years?
Eg the Vanguard global FTSE all cap accumulation fund which has returned 10.45% with dividends reinvested.
And considering your whole portfolio not cherrypicking the bits that did well.
I have, with a fairly sticky and concentrated portfolio of usually 10-15 UK small/midcap companies. Obviously I don't beat it every single year in isolation, but my CAGR over the last 5, 10, 15, 20, 25 years and since inception (~27 years) has beaten global market-cap weighted equities over all those periods.Eg the Vanguard global FTSE all cap accumulation fund which has returned 10.45% with dividends reinvested.
And considering your whole portfolio not cherrypicking the bits that did well.
Obviously it's not the right benchmark for what I do, but as a practical measure of opportunity cost - what I'd realistically do otherwise - it's a fair comparison and one I do track.
That said it's not necessarily something I'd recommend someone starting an investing journey from scratch tries to replicate. It's a pond I fish in because it's still inefficient enough for me to have an edge, but the flip side of that is occasional logic-defying moves and drawdowns that would make most index investors wince
I wouldn't bother trying to stockpick among the large cap household name universe where the market is far too efficient for me to have any edge.Do you mind me asking what your CAGR for the whole 27 years was? And was it worth the extra effort would you say over the index return?
Has it been worth it? Financially yes, obviously, but particularly at this point it's more about the intellectual reward so I'd probably do it anyway.
" Once you have chosen your split between stocks. bonds, cash, property etc I don't see why you woudl ever need more than one index fund to be honest."
Because everyone is at a different stage in life: age, job security, projected pension, existing 'pot'.
(typically) why on earth would someone that's years from retirement and who know's that their pension may fall short of their 'ideal' invest in something that's average....apart from the ease of buy & forget.
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
Because everyone is at a different stage in life: age, job security, projected pension, existing 'pot'.
(typically) why on earth would someone that's years from retirement and who know's that their pension may fall short of their 'ideal' invest in something that's average....apart from the ease of buy & forget.
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
locoloco said:
" Once you have chosen your split between stocks. bonds, cash, property etc I don't see why you woudl ever need more than one index fund to be honest."
Because everyone is at a different stage in life: age, job security, projected pension, existing 'pot'.
(typically) why on earth would someone that's years from retirement and who know's that their pension may fall short of their 'ideal' invest in something that's average....apart from the ease of buy & forget.
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
Of course, but stripping out the sector laggards from the pat 15 years is easy in hindsight. But how likely is it that you can accurately do this going forward, that's really my point. Just as most people can't predict and time the market in advance. If the sectoral weakness is known about in advance, surely it's already priced in?Because everyone is at a different stage in life: age, job security, projected pension, existing 'pot'.
(typically) why on earth would someone that's years from retirement and who know's that their pension may fall short of their 'ideal' invest in something that's average....apart from the ease of buy & forget.
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
Everyone is different, some tinker/active manage 'cos they enjoy doing it as a hobby, performance chasing, or believe they have an edge (but in reality. very very few do). I used to hold around 10% of my portfolio on active funds many years ago, but since leaving the paid employment world, I have resorted to the index approach with an asset allocation suited for my needs. My mindset shift are mainly due to 1) my interest has waned on keeping up with the financial news/market 2) I rather spend my time with my kids or my other hobbies 3) I don't need to shoot the lights out with my investment return to maintain my lifestyle i.e. I don't go performance hunting like so many on this forum. Life is just far more chilled...
732NM said:
Most children don't have any income apart from pocket money for treats, and end up in large debt post university.
They don't but I think those who are keen on investing, have money to invest and have children would be very wise to open a child ISA and use this methodology for their own investment journey too.You and they will beat 99% of investors over very long periods of time.
locoloco said:
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
The bit in bold is doing some pretty heavy lifting. It would be nice if broad sector/whole market (macro, really) guesswork was that easy in reality...and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
birdcage said:
732NM said:
Most children don't have any income apart from pocket money for treats, and end up in large debt post university.
They don't but I think those who are keen on investing, have money to invest and have children would be very wise to open a child ISA and use this methodology for their own investment journey too.You and they will beat 99% of investors over very long periods of time.
NowWatchThisDrive said:
locoloco said:
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
The bit in bold is doing some pretty heavy lifting. It would be nice if broad sector/whole market (macro, really) guesswork was that easy in reality...and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
on the flipside - eg/ with energy usage being a bottleneck with growing demand, it was fair to say/see that most likely for the coming period the sector and specific companies would/will do well.
Same with everything related to the whole rack/infrastructure of AI build outs - soon as the hyperscalers announced how many billions they're pumping into DC's this year and subsequent years, and that certain companies had a solid niche position if not a complete moat - then it was a high probability that they'd outperform..
locoloco said:
soon as the hyperscalers announced how many billions they're pumping into DC's this year and subsequent years, and that certain companies had a solid niche position if not a complete moat - then it was a high probability that they'd outperform.
Did you back that "high probability" with hard cash? If so, how far have you outperformed the main indexes?locoloco said:
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy). .
Sounds easy....
The Gauge said:
Yes I can see why it would. This is what Im struggling to get my head around as diversification appeals to me as a way of spreading the risk.
But once you've set up a Global Index tracker, any further investing in other markets is simply concentrating your portfolio and going against your original diversification plan. To maintain diversification it would require putting that further investment into the existing global tracker. But then all of your money is in the same fund, which kind go goes against the idea of spreading it about.
I suppose thats the beauty of a global index, it maintains diversification and whilst it minimises any big falls, but it also minimises any big gains?
I suppose it comes down to what concentration risk one is looking to mitigate.But once you've set up a Global Index tracker, any further investing in other markets is simply concentrating your portfolio and going against your original diversification plan. To maintain diversification it would require putting that further investment into the existing global tracker. But then all of your money is in the same fund, which kind go goes against the idea of spreading it about.
I suppose thats the beauty of a global index, it maintains diversification and whilst it minimises any big falls, but it also minimises any big gains?
If someone is buying a global tracker but feels the market is wrong and a global tracker is too weighted to the US, buying an S&P 500 tracker in addition doesn't solve that problem - it makes it worse.
Buying an emerging markets tracker, or UK index tracker (for example) does reduce the % of your £'s allocated to the US so whilst I suppose doing so increases concentration to the UK or EM, it does reduce the overall exposure to the US.
If someone wants an underlying passive approach, but doesnt like the idea of market cap weighted index then as mentioned before simply shoving £'s into a low cost multi asset fund is a great option.
£100k in a global tracker gets you £60k in the US, whilst £100k into something like this gets you the following breakdown. Will it do better than a global tracker long term? Probably not. Is it more diversified? Certainly;
Inlineonline said:
My millennial while they are still living at home and have no rent etc to pay are putting 80% of their earnings into an ISA each month (index tracker). It's a great mindset to get them into where most of their earnings go towards building for their futures.
I agree to a point. But life is short as well and it is nice to enjoy/ make the most of it sometimes. I have always saved but i have done some daft stuff over the years as well. Cars/ holidays/ drinking with the lads etc. I don't really regret any of it although if i hadn't of done it i would have more money now.I think i can always earn more money, i cant get time back. Although it is a balancing act. I definitely wish i had started investing sooner. But i try not to beat myself up i started so that is the main thing.
locoloco said:
" Once you have chosen your split between stocks. bonds, cash, property etc I don't see why you woudl ever need more than one index fund to be honest."
Because everyone is at a different stage in life: age, job security, projected pension, existing 'pot'.
(typically) why on earth would someone that's years from retirement and who know's that their pension may fall short of their 'ideal' invest in something that's average....apart from the ease of buy & forget.
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
Did you used to post under a different handle "greengreenwood7"?Because everyone is at a different stage in life: age, job security, projected pension, existing 'pot'.
(typically) why on earth would someone that's years from retirement and who know's that their pension may fall short of their 'ideal' invest in something that's average....apart from the ease of buy & forget.
even a minor tweak to passive could yield massive diff in performance: strip out just the sector laggards would have changed the sp500 results for the past 15 yrs from 600'ish % to above 750%.....as those sectors are/were cyclical might not have been too much of a stretch to make the choice to stay away from them (fyi: real estate, material, energy).
and now we started a new cycle a while back, then materials and energy are likely to outperform other areas maybe such as discretionary for the next 'x' years.
Inlineonline said:
My millennial while they are still living at home and have no rent etc to pay are putting 80% of their earnings into an ISA each month (index tracker). It's a great mindset to get them into where most of their earnings go towards building for their futures.
Which index?732NM said:
Inlineonline said:
My millennial while they are still living at home and have no rent etc to pay are putting 80% of their earnings into an ISA each month (index tracker). It's a great mindset to get them into where most of their earnings go towards building for their futures.
Which index?They’re in Vanguard FTSE global all cap accumulation, it tracks the whole world market weighted by value (ie 60% S&P)
I don’t see any need to try to second guess the future with anything different to this.
And they’re not living hair shirt lives at all, they spend their disposable cash on experiences rather than possessions. Neither need or want the latest iPhone or headphones that sort of thing, they’d rather put that money into savings. They buy quality clothes that will last rather than fast fashion and mend things when they break.
It’s a mindset.
whoever asked 'did i invest in those things with hard cash' - yes i did, heavily into a few energy plays, and latterly have rotated more into a wider array of stocks still in energy/agentic ai theme/infrastructure with some steadier purchases in commodities to take a bit of the beta overload off the table. Did the strategy beat indexes etc - yep ( if you're familiar with Iren/Cifr etc they've been kind to me).
all smooth sailing - nope, messed up various things: converting/rolling a number of Iren contracts, held mstr for too long instead of rotating, didn't have enough cash on hand for the April dip last year. and yes i did post prev under that other 'handle'.
all smooth sailing - nope, messed up various things: converting/rolling a number of Iren contracts, held mstr for too long instead of rotating, didn't have enough cash on hand for the April dip last year. and yes i did post prev under that other 'handle'.
Inlineonline said:
732NM said:
Inlineonline said:
Why do you keep asking this same question?
Because you never answered the question.That's not an Index.
It s a globally diversified passive fund
What point are you trying to make?
Totally useless terms when trying to work out what you meant.
I thought it was obvious the first time, when I asked you to clarify what it was you meant, so some sense could be made from your post.
Turns out you were referring to a vanguard fund.
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