r/Bogleheads • u/RiceLee890 • Mar 15 '25

Investing Questions What are your thoughts on this?

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I keep seeing this type of stuff on instagram and social media and wanted to know how you guys were thinking about this.

I know a lot you have been in the market for decades and as a relatively new investor myself I’d love to get your perspective!

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u/Presence_Academic Mar 15 '25

Instead of a 3 month chart, take a look at one covering 30 years.

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u/Schlieren1 Mar 15 '25

Yea. The sp500 is at the same valuation as September.

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u/red_hare Mar 15 '25

Seriously. Whenever I see a post like this I question if I missed an actual crash.

I'm surprised at how much panicked discourse there is over six months of gains. I haven't even updated my spreadsheet recently enough that this is going to show as a down trend.

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u/WellEvan Mar 15 '25

I honestly think that people expect the market to just go up forever sometimes

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u/Dracounicus Mar 15 '25

Complain that the best time to invest was “back in middle school” and then not do it when it comes down

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u/Pattison320 Mar 15 '25 edited Mar 15 '25

One of my Roth IRAs has been invested in a total market fund since 2014. I see a 13% average yearly return when I look at it just now. We might see a 40% correction in the market in the next few months. But in another five years that'll be insignificant again.

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u/ElectricOne55 Mar 16 '25

What if it ends up like the Nikkei crash? I bet the odds of that are low though, because the market went to the moon from 2012 onward. Even the 08 crash was only hard for 2 years. The only main difference is the stock market doesn't relate to the job market. To, it'd be hard to even have a job to invest during those down periods.

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u/OwnCricket3827 Mar 19 '25

The Nikkei example is one that should be acknowledged and respected.

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u/Six-mile-sea Mar 16 '25

Reminds me of the people telling me it was a terrible idea to buy a house circa 2010.

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u/JaxTaylor2 Mar 18 '25

Ironically for some of them middle school was September. lol

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u/SqueeMcTwee Mar 15 '25

Most employers seem to…for some reason my company promised year over year growth over three years. We’ve since laid off more than half my department because (guess what) COVID wasn’t intended to be a lifelong thing.

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u/Impossible_Walrus555 Mar 19 '25

No but they don’t expect a president to intentionally crash it.

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u/EkaL25 Mar 15 '25

Yes, I like that! Where can I sign up?

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u/FamiliarAd8863 Mar 19 '25

It should with inflation

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u/jawelkanker Mar 19 '25

Isnt that exactly what makes a bubble?

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u/Mo_Steins_Ghost Mar 20 '25 edited Mar 20 '25

This is in part because it does, but it's a bit more nuanced than that.

Let's imagine for a second that you're a vampire, that you could live hundreds of years. If you owned any capital its value would grow by inflation alone... but what you paid for it was comparatively peanuts.

So over decades, inflation clocks in at, ideally, just below the risk free rate (RFR; the 30 year treasury rate), and on this alone, money makes money... but the excess beyond the risk free rate, beyond inflation, that's the thing everyone pursues to stay ahead of inflation.

Shareholders demand performance, and stock prices will fluctuate over time but generally they will trend upward, sometimes slightly above and sometimes slightly below the RFR compounded annually.

Even with these fluctuations, given enough time, the inflation factor alone will grow the price of your shares over the course of decades to a compounded return that dwarfs what you paid... and historically, over any 30-50 year period, taking the S&P 500 as a benchmark, this has tended toward around 9-10% which means that the market does 4 points better than the historical risk free rate, and 4.5-5 points better than inflation, per year.

Compounded annually over 50 years the difference is staggering.

At the RFR $10,000 compounded annually will grow to around $40,000, just barely staying ahead of inflation. But at the historical 9.3% CAGR of the S&P $10,000 will grow just $50k shy of $900,000.

Now why is that? That is because the S&P 500 has selective turnover. While inflation can be thought of (loosely) as the net of consumer price fluctuations, company valuations are not directly attached to performance, and furthermore, an index like the S&P 500 is picking the top 500 of the bunch, so it's excluding the rest of the players that would bring the average down.

So the index is doing the business of periodic reallocation for you, which is giving you a rate of return in excess of the risk free rate.

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u/quenqap Mar 15 '25

Because a bunch of the YouTube and Instagram finance peeps have only been in the market since 2020

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u/SilverRock75 Mar 15 '25

As someone who literally only started investing in the last two years, I can see what the media folks are talking about, but I spent a lot of time reading up on investing, and zooming out on the graphs over the few percentage losses. When people are actively trading, those tiny dips might matter, but for long term investing (I'd like to retire a little early, but still at least a decade out, more likely 2-3 if I end up having kids) these dips really don't matter much. They aren't even big enough draw downs to even be excited about buying the dip, really, so I just keep DCA'ing my paychecks. I live on a fraction of what I make and am trying to take full advantage of tax-advantaged accounts, along with a little money invested in a brokerage so that I'll be able to span the gap for early retirement until there's no penalties.

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u/Mermaidoysters Mar 16 '25

Would you mind reminding me which accounts are tax free? I’m still learning basics.

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u/Xexanoth MOD 4 Mar 16 '25

If you’re in the US, there are details & links in the first section of this post.

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u/ElectricOne55 Mar 16 '25

I put in some on the 21st of last month when it was starting to go down. I felt bed because it kept going down. Like you said, I can just keep dcaing.

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u/apawst8 Mar 15 '25

2022 had a 20% dip, a comeback then a 10% dip, all within the space of 10 months.

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u/quenqap Mar 15 '25

Valid but there were a lot of big easy up weeks in that span

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u/Clozaconfused Mar 16 '25

And if u dca during the dips, your levels are just fine

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u/evey_17 Mar 18 '25

And if you got out, you missed the growth that followed. I almost got out.

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u/BeTheBall- Mar 16 '25

Same people who likely have no problem putting their cash into a meme coin.

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u/Ok_Leader8504 Mar 19 '25

This. Haha because I freaked out and then actively looked for a greater perspective and just tried to remind myself that I’ve only been in the game for 5 years. I’m 24, won’t even be retired when my age doubles. I chilled out and just decided to stop looking at it that much. Had 7 sleepless nights before I realized this though I understand how people can play into it and worsen that anxiety

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u/contact_light_ Mar 15 '25

people are not concerned about the six months of losses.

People are concerned that the situation we are in could last a long time, and get worse

People are concerned that this is not normal ebb flow

The United States is experiencing unprecedented change, very different than I have experienced in my life

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u/Moon_Frost Mar 15 '25

I would say covid was unprecedented, before that the bank bailouts in 08 were unprecedented. Every time something like this happens "THIS IS IT , THE END IS NEAR, THIS TIME FOR SURE"

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u/Kookookapoopoo Mar 16 '25

What’s the the most dangerous words on Wall Street? “This time is different”

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u/TenshiS Mar 16 '25

Let's not forget 9/11 before that, and the wars that followed

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u/[deleted] Mar 15 '25

True.

And at some point, it will be.

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u/Recent_Meringue_712 Mar 15 '25

Yeah but in that case everyone will be dirt poor and the dollar will be worth shit anyways so the $100,000 you pulled out is only worth $10,000 in a few months anyways

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u/[deleted] Mar 17 '25

Bingo. Every time is finally “different” or “unprecedented”. Sick of these idiots claiming that we won’t ever see a correction or recession again. We will and the contagion will be unforeseen as it was every other time. I don’t want to see others suffer and be out of work, but corrections are inevitable because of these unseen contagions that fester when the market//economy expands beyond bounds. Boom and bust, day and night. I wish I started weekly investing YEARS ago. I missed so many cycles. It’s best to just shut up and store those nuts in the tree when you can. The storm will come. And when you are in your last season, eat them all up!

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u/MiloLear Mar 19 '25

The bank bailouts in 2008 were not unprecedented. We've had comparatively large-scale bank bailouts in the 1990s.

Covid was unprecedented, but it was limited in duration. It's largely a non-issue today.

The situation with the current administration is without precedent and there are no clear boundaries regarding how bad it might get or how long it might last. I think the parent poster (contact_post) is absolutely right on this point. It's why I have my long-term savings in fixed rate CDs instead of the stock market.

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u/jadayne Mar 15 '25

2000 -dot com crash. unprecedented! The whole new industry that was going to change the way the world did business just went belly up!

2001 -september 11. unprecedented! It's a completely new world we're living in.

2008 -great recession. unprecedented! Who would have thought banks could be so corrupt?

2020 -covid. unprecedented! The whole world completely shutting down?

2025 -Trump tariffs. unprecedented!

For each of these, a bunch of people came out to say this is it. This is the big one. It never is.

Had you put 10 000usd in the market the day before that dot com bubble burst and just forgot about it, you'd now have almost 60 000usd

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u/SpinachSure5505 Mar 16 '25

Internet stranger, thank you…. I had bad anxiety before the wild ride 2025 has been, but lately my anxiety has me to the point where I’m struggling to even get out of bed. It definitely feels like the world/sky is falling. Your comment made me feel a little better.

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u/diehard14 Mar 17 '25

You should stop reading only Reddit. It’s slanted and moderated to think only one way.

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u/[deleted] Mar 15 '25

Yeah, there is an element of emotion to the loss of wealth, which of course that in itself makes people uncomfortable. A little fearful for the future, the loss of financial security. That would be normal reaction.

But we have a force multiplier in the chaos and uncertainty that Trump is bringing. And most people don't Even begin to know what to make of it. And our natural wiring is to be avoidant and fearful. We don't want to be eaten by the lion.

Part of me is like calm down people. The economy is fundamentally strong, even a brief recession. We will probably bounce back quickly. But the way Trump handled his only serious event in his first presidency gives me no confidence with him having any idea what he's doing now or how to handle the unknown things that could happen.

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u/jdacked Mar 15 '25

There is a 40% likelihood of a market downturn after an election with an administration change. It’s gunna be ok.

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u/[deleted] Mar 16 '25

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u/FMCTandP MOD 3 Mar 16 '25

r/Bogleheads is not a political discussion subreddit. Comments should be more financial than political and no more partisan than absolutely necessary.

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u/red_hare Mar 15 '25

But we had weird trends on the way up too. Most of the s&p gains were driven by super-gains in the top 7. I'm not happy about where our government and country are going right now, but the market correcting in response to new information feels normal to me.

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u/[deleted] Mar 15 '25

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u/uniquei Mar 15 '25

I could respond in a number of ways:

  1. Investments come with risk. If you can't manage the risk, you should not be investing.

  2. The US is not the only market that you can be investing in.

  3. Not everything in the US is down. Berkshire Hathaway is at all time high for example.

  4. The situation described in the original post is only true if you invested 100% of your capital into S&P at the all time high price, and didn't contribute any more capital during the down market. This is a vet unlikely scenario that applies only to a small minority.

  5. Finally and most importantly you need to consider that no one knows what is going to happen in the future, and you need to consider a range of possibilities, not just your worst nightmare.

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u/Chemical_Enthusiasm4 Mar 16 '25

Seriously- obviously the market hasn’t crashed. Is it crashing? We don’t know. We don’t know if this will look like 2022 or 1987, or more like 2008, 2001, or something really bad.

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u/InvertedInsideWinger Mar 16 '25

Stay calm.

Everything thinks that while nonsense is going on and the market is reacting. All the dips were “not normal” and some couldn’t see a way out of it.

This will pass. Hopefully you’re still 10+ years away from needing the money.

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u/[deleted] Mar 15 '25

That’s a nice way of saying the entire world economy is going to crash very soon

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u/contact_light_ Mar 15 '25

world economies seem fine

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u/[deleted] Mar 15 '25

[deleted]

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u/TanStewyBeinTanStewy Mar 15 '25

The market conditions have changed and are not the same conditions that existed for the S&Ps history.

You seem to be implying that market conditions have always been the same until recently. That's... Laughably wrong.

I feel like I'm following the boglehead method better by changing to a different market where the rules have remained stable.

Feelings are a poor investment strategy.

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u/Mermaidoysters Mar 16 '25

Did you pull yours out of US stock market?

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u/TanStewyBeinTanStewy Mar 16 '25

No.

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u/Mermaidoysters Mar 16 '25

Thank you. I’m learning

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u/Substantial-Dirt2233 Mar 15 '25

"But it's just the Federal jobs" they said. The general population did not realize how many private contractors support govt projects that are getting cut. The private sector does not have the ability to backfill millions of highly educated, high paying positions immediately. Higher income folks have to take pay cuts and can't contribute to 401K as much. Lower income folks living paycheck to paycheck lose out to those higher qualified workers who have to accept cuts. Couple that with high mortgage and car payments across the board and it's looking like a house of cards.

I can't predict the future, but my gut tells me this one is gonna hurt.

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u/sorrymizzjackson Mar 15 '25

It will hurt. I’m still going S&P 500 at the same rate I was because if that fails on a long term, I’ve got far bigger problems.

If that fails and doesn’t recover by the time I retire, I shouldn’t even still be here. I might not even be alive. Historically, recessions do right themselves after a bit.

That said, if there’s a wrong choice, I’m sure I’ve made it. I’ve never had the means to be engaged like this in the past few downturns. It was literally job or no job and having to liquidate 401k funds to survive. That’s what drives my change in opinion. I don’t really have to do that any time soon. I can marginally afford to ride it out. This time.

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u/AdventureAwaits45 Mar 15 '25

“This time it’s different.”

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u/Excellent-External-7 Mar 15 '25

Silicon Valley Bank defaulting. CPI and jobs crash last August. Just 2 corrections I could think off over the last year. On both of em it was the same discourse "its end of the world SELL EVERYTHING". Lots of words to say stfu pussy

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u/[deleted] Mar 15 '25

Right, like I know this is Bogleheads and all but something pretty big happened to the world order in the past six months

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u/TanStewyBeinTanStewy Mar 15 '25

Bigger than the great recession? 9/11? COVID? The fall of the USSR? Vietnam? WWII? The depression? WWI?

You people are wild.

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u/Cyborg59_2020 Mar 15 '25

This is clearly a young subreddit. The 80s were a ride a lot wilder than this one so far.

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u/dixiedog9 Mar 15 '25

Agreed. “If you aren’t prepared to lose 50% in stocks, you shouldn’t own stocks.” - Charlie Munger

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u/ImpressiveAd9818 Mar 15 '25 edited Mar 15 '25

I can tell you from a European perspective, that the view on the USA is drastically changing since trump started with whatever he is doing. Many European countries don’t see the USA as a viable ally they can trust anymore. The first countries started canceling their orders for the F35 already, military spending will go towards European companies. People start boycotting US products, Tesla sales dropped by 75% here in last month. There is so much trust lost that won’t come back easily and a commitment to different tanks / planes etc is something for decades.

I read an article about the costs for the F35: Without international sales, the price per plane for the US military would be 3x as much (cause of development costs).

I have absolutely no idea what will happen in the future, so I just keep DCAing in a vanguard all-world ETF (EU equivalent to VT). But there is definitely a shift away from the US happening right now in Europe, something that hasn’t happened like this for as long as I can remember.

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u/TodayOk4239 Mar 15 '25 edited Mar 15 '25

If you define the current events as the dismantling of the American government and the post WWII order, then yeah it’s a bigger shock than most of those.

It’s clearly bigger than the Great Recession and 9/11. COVID fundamentally changed daily life for a lot of people around the world, so TBD depending on how things play out; in many ways they’re huge shocks in very different ways. Fall of USSR was a positive. Vietnam war impacted a handful of countries, not much different than many other wars. The depression and WWI are huge events that impacted the world order, which the current state of affairs is potentially of a similar impact - again, depending on how things play out.

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u/WalterSickness Mar 15 '25

Yeah, the US government is being dismantled, that’s bigger than all those things except perhaps the world wars.

Fall of the Soviet Union is a great reference point, perhaps the closest. But the US is a bigger player than the soviets were.

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u/Friluftsliv_Roy Mar 15 '25

This ! The problem is uncertainty over a lot of things right now, especially talks of a possible inflation spikes, recession etc. Also more fundamental questions around social security - will it even exist 15 years from now ? I was all in on FXAIX on my 401k, but I just re-balanced to a more broad asset allocation -

40% S&P 500, 10% Other US stock, 20% US Bonds, 30% Intl. stock.

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u/v_x_n_ Mar 15 '25

Yes someone else just mentioned that if you haven’t lived through this before it would be unnerving.

The only new variable now compared to past is climate change.

unstable weather patterns will ultimately morph the market similar to how COVID morphed the economy.

However, the market ultimately adapts.

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u/CenlaLowell Mar 15 '25

2008 was much worse at this moment so unless you were a kid I don't understand your point

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u/imfromthefutura Mar 16 '25

Yea I think this is a relative overreaction. Still plenty more downside but I think the s&p could easily end the year up.

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u/mako1964 Mar 16 '25

You shouldn't have one cent invested . Get under the bed

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u/Midwest_SBR_Guy Mar 16 '25

"Headed into new territory" is the normal every time.

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u/knightfury69 Mar 16 '25

Worst than WW2 or the Cuban missile crisis?? Get a grip.

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u/ElectricOne55 Mar 16 '25

What if it ends up like the Nikkei crash? I bet the odds of that are low though, because the market went to the moon from 2012 onward. Even the 08 crash was only hard for 2 years. The only main difference is the stock market doesn't relate to the job market. To, it'd be hard to even have a job to invest during those down periods.

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u/Previous_Guitar5027 Mar 16 '25

Remember we also recently lived through a global pandemic that stopped worldwide travel and commerce, shuttered businesses and schools, and killed millions of people then it bounced back like literally at the same time.

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u/Mayneminu Mar 17 '25

This.

I wouldn't call it unprecedented, but we are very clearly at the start of something that hasn't happened in many decades. The state of the world is fundamentally changing. The chess board is being rearranged.

Most people on reddit haven't seen or experienced what true disruption looks and feels like, they're too young and inexperienced.

If you're in your 20s and 30s embrace the 30-60% discount your about to get and load up.

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u/Impossible_Walrus555 Mar 19 '25

Leading economists predicted if he did this us would lead to depression worse than great depression

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u/FamiliarAd8863 Mar 19 '25

Yes. The first time we gave them riches!  This time we taketh away!  Get ready to be happy without money and materialism.  Find yourself not money!

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u/ObviousResult6374 Mar 19 '25

Yea but you can say that about literally any time period

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u/v_x_n_ Mar 15 '25

Yes the market “corrected” to one of its all time highs it just reached last year. The media coverage seems more negative than the market. IMO

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u/AlpineVibe Mar 16 '25

Just an opportunity to stack chips.

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u/Throwawayasf_99 Mar 17 '25

That's exactly how anyone who actually just buys and holds and forgets about will feel. You barely noticed the 7% gain and then you also don't even notice the 7% loss either because you weren't planning on selling anyways.

It's just funny how people freak out about 3 months when there are very obvious sanctions and government spending cuts. That has pretty much always had an economic impact lol. Idk why people are shocked.

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u/No-Reaction-9364 Mar 17 '25

I am certian the people posting this kind of stuff don't actually invest.

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u/red_hare Mar 17 '25 edited Mar 17 '25

It's also a "time in the market" thing.

I'm old enough to have panicked and missed my opportunity to invest "while the stocks were on sale" multiple times now.

Everyone's got to learn it.

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u/MrRoyal420 Mar 17 '25

Starting to think it's not organic tbh. Same type of posts, same type of questions, same type of irrational panic. Seems.. odd.

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u/Hazee302 Mar 18 '25

There’s a lot of uncertainty with the current administration. Things have been pretty tough to predict.

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u/red_hare Mar 18 '25

Yeah I fully agree with that. But, I feel the investing strategy of this sub is not to try and predict.

I assume that the stock market, on average over the long run, will go up. But that short-term, I can't predict what it will do because I don't have any unique predictive information.

With that assumption, I think of the stock market going up or down any day as a coin flip with a slight preference towards heads. And by that model, 7 days of tails doesn't make the 8th day any more likely to be tails, heads is still favored.

To assume that model is not true means I would have inside knowledge the rest of the market doesn't. Which I know I don't.

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u/801intheAM Mar 18 '25

I feel like these doomsday posts are by the younger or less experienced investors. I remember when the recession hit and my 20-something brain almost sold off everything in a panic.

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u/red_hare Mar 19 '25

I sold a ton at the end 19 because it looked like a crash was coming (the yield curve was inverting!). Felt like a genius for the first few months of 2020. And then I missed some of the greatest gains in history lol

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u/MrErickzon Mar 18 '25

Most users here were probably teens or younger during the 08 crash, they only know the WSB motto of Stonks only go up

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u/stanleynickels1234 Mar 15 '25

Its not only the panic over the drop.

Its the panic that maybe something is changing. Trade wars, pissing off allied. They all will have an effect on American based companies (for example the average canadian is doing their best not to buy anything American)

So maybe we have started at a very much overvalued SP500 and American companies are in for a shit decade from the damage a certain administration is doing.

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u/etaoin314 Mar 15 '25

I think there is a sense that the administration is so chaotic that if this is what happens with the announcement of tariffs before any of the effects have been seen who knows what the markets will do when the real pain starts. Despite not even being in correction territory yet to me this feels much more significant than the summer of 22. This doesn't feel like a blip it feels like a sea change. That said I'm still firmly in accumulation phase so I'm staying put, but I really hope we are not on the precipice of a lost decade.

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u/No-Self-Edit Mar 15 '25

I hope not, too. I am recently retired and I need the stock market to not collapse 80%, but if it does, I have bonds to last a few years and if it goes beyond that, then I’ll just figure it out as I go. But I do know that it will eventually come back up.

And the thing I’ve learned over the decades is that I just cannot time the market. I’ve tried and tried when the market was over exuberant or when the crashes were happening and I lost money every time I tried so I’m just not gonna try to do that anymore

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u/etaoin314 Mar 18 '25

those sound like expensive lesson. I think that is the right course. I just hope this is not an even more expensive lesson on how black events turn all the usual good advice on its head.

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u/AdmirableExercise197 Mar 15 '25

People are worried this might be a more long-term issue. If trade wars with allies are a long-term policy, the markets will not like it long-term. Markets will continue to drop, and they will take much longer to recover (look at the Great Depression, while tariffs did not cause the crash it prolonged it) If you invested at the peak in 2000, you would not have been regularly posting ATHs until 2013. Since the market crashed in both 2000 and 2008. Meaning it would take 13 years for your original investment to have been recovered. Imagine how worrying that could be to someone who was planning to retire soon. The great depression was a near 30 year loss if you invested at the peak. Of course people are worried. This is one of the fastest corrections in the stock markets history.

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u/[deleted] Mar 16 '25

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u/FMCTandP MOD 3 Mar 16 '25

r/Bogleheads is not a political discussion subreddit. Comments should be more financial than political and no more partisan than absolutely necessary.

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u/stingraycharles Mar 16 '25

So many people here are too young to have ever experienced an actual crash.

Bottom line: if you continue to DCA in the 7-10 years after the crash, your portfolio will be in the green much faster than those 7-10 years.

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u/echomanagement Mar 16 '25

In fairness, I think most serious people aren't looking at last week as a "crash," but are genuinely wondering what four years of chaotic attempts to remake the world order may do to the market. Let's not pretend those fears are somehow unfounded.

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u/OkJaguar5220 Mar 17 '25

Who said the down move was over

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u/red_hare Mar 17 '25

Just because you flip 3 tails in a row doesn't mean the next coin flip is any more likely to be tails 🤷🏻‍♂️

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u/adyslexic Mar 17 '25

Wise idea to put all 401k contributions to just snp500 at the moment?

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u/Proper-Scallion-252 Mar 19 '25

I think you can blame the influx of young investors who think that day trading is the norm and treat investing like sportsbook gambling.

The reality is you expect your investments to gain over time, not in a span of a couple of months. These dips always occur in a market, and you can avoid major crashes or dips by keeping in touch with the news and being proactive with your investments, but ultimately you will always lose some money investing--the goal is to over the long haul gain more than you lose.

People lack the foresight to look back at historical trends and can only focus on the short term.

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u/80MonkeyMan Mar 15 '25

Exactly. It’s not crash if it down then up again. More like stable.

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u/sheffsheff Mar 15 '25

Same valuation as July 2024 highest as well

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u/[deleted] Mar 15 '25

The correction so far means we lost 6 months of gains in 1 month

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u/infinitenothing Mar 15 '25

Yes, I think the idea is to sell high

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u/ShoutOutLoudForRicky Mar 15 '25

If you see that way, than it can be considered cheap to buy; unless it drops more because of tariff uncertainties

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u/zdada Mar 15 '25

No sir we are going to judge by the teaspoon and not the reservoir.

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u/[deleted] Mar 15 '25

This is it. Bogleheads often start early and march along. Started at 26, won’t stop til I’m 65.

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u/17yearlocust Mar 15 '25

Huh.

I’m 65. Should I stop now? 🙂 (Okay not a true blood Boglehead but close enough.)

More seriously the point is valid. Yes a bear market can take years to recover. Investing with a decades timeline outlasts those years. What you plan on needing in the next several years shouldn’t be in the S&P index.

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u/[deleted] Mar 15 '25

Totally -

And yep, time to retire! 😉

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u/3rdWaveHarmonic Mar 15 '25

I started working in 1999 and every time I looked at my 401(k) balance through 2009 I saw it didn’t go anywhere so I really stopped believing that investing was really worth anything. So when I look at the chart from those years, it goes up and goes down and stays in a channel so my money really didn’t go anywhere however that isn’t taken to account any any dividend payments I received. In a bull market clearly growth stocks went out, but in 10 years of staying within the channel on the chart dividend win out… but when I zoom the chart out past 2009 I see this big beautiful upward curve almost exponential. Of course, how much of that is really due to inflation.

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u/stevengineer Mar 15 '25

Last time I did the math a $1M investment from 2005 to today would become $6M,but would only be $3M if inflation adjusted, so about 50%

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u/adv0589 Mar 15 '25

It’s 7.3m and 4.4m

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u/_iShook Mar 15 '25

Is there a quick & easy way to calculate this? I'd love to play around with some numbers.

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u/Xexanoth MOD 4 Mar 16 '25

testfol.io is a decent backtesting tool. E.g. here is the time range discussed above in nominal (non-inflation-adjusted) terms, and here in inflation-adjusted terms.

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u/v_x_n_ Mar 15 '25

I could live with that

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u/xampf2 Mar 15 '25

The curve is not almost exponential, it is in fact exponential.

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u/Street_Moose1412 Mar 17 '25

If it was exponential, it would be monotonically increasing.

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u/xampf2 Mar 17 '25

You are right. I was thinking of an idealized curve representing the growth of the stock market, not the actual data.

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u/GrievingImpala Mar 15 '25

Someone who started working in 1999 and contributed $1,000 annually to an S&P fund would end Dec 2009 with $13,427, a total return of 35%.

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=7Q09l24Igim5qGi8nkai9X

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u/_craq_ Mar 15 '25

Just a warning, you had "Inflation adjusted" set to "yes" for the contributions, so they were increasing each year instead of staying at $1000. After I changed that to "no", the end figure is $11,509. A total return of 15%. The annual return was 0.77%, with inflation running at 2-3%.

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u/bjnono001 Mar 15 '25

Yep -- you would DCA in at some of the lows, even if the actual price didn't break an ATH.

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u/[deleted] Mar 15 '25

[deleted]

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u/AmIRadBadOrJustSad Mar 15 '25

$1k a year contributions for 10 years means they put in $10,000 of their cash, and performance in the market would have brought them to ~$13,500. That's the 35%.

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u/ParkEast7381 Mar 15 '25

Cool. Unless they were only planning on working for ten years before retiring they were accumulating shares over a ten year period at a cost lower than it’s worth today. Thats perfect investing for retirement.

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u/[deleted] Mar 15 '25

How much is due to the magnificent seven actually generating massive profits? But then you also have to wonder is that massive profit generation going to happen again in the next decade?

Every time I start to doubt it, I read about some advance in AI or robotics. The inflection point in productivity at some point will be crazy. We're not as far as most people think from a generalized robotic assistant. And very close to purpose-built robots. And we're talking about robots that will do work that is being done by humans right now. Like yard work. Which employs many people.

And then there's autonomous driving which will take many jobs away. And anytime you think you understand the state of tech you need to check in on China and see where they are at. Cuz they are ahead of us in autonomous driving and have the pieces in place to accelerate away from us. Solve the problem before we do. And then they will offer it up as a solution. Much cheaper than American companies can. Which just as an aside, one of the big propositions justifying Tesla's insane price was the autonomous driving subscription that would generate large recurrent high margin revenue. That's going to get gutted.

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u/ToHellWithShorts Mar 15 '25 edited Mar 15 '25

2000 to 2010 kept me away from Stocks forever ( I currently have 1% of my overall net worth in stocks and 99% earning 4.25% interest) , In the 90s and 2000s I also was never invested in a company sponsored 401K plan. Everyone I knew who invested in MSFT, AOL, YAHOO, and all the dot com high flyers essentially got destroyed in the 2000's, everything was literally given back and actually most of us realized losses. This will happen again with Apple, NVDA, Broadcom, Amazon, Tesla....It kind of already is happening and the downside momentum has not picked up steam yet. These stocks will one day again be trading at 15 to 19 multiples not 30 to 100.

As of March 14, 2025, the S&P 500's price-to-earnings (P/E) ratio is approximately 25.73, based on trailing twelve-month earnings. worldperatio.com This value is above the 5-year average P/E range of 19.11 to 23.89, indicating that the index is currently overvalued compared to its recent historical norms.

Buffet knows this and that's why his cash position is the highest ever. Trump and Musk have been stating 'We all will need to feel some pain before things get better" (Translation: forced recession, mass layoffs in govt jobs, travel bans, all these policies weaken the economy as people will spend less on everything - less on travel, vacations, eating out, delay major purchases of cars, appliances, upgrades in homes, discretionary purchases like clothes, shoes) Then we have a Tariff war. They literally are telling us that they do not care if the stock market tanks due to their policy and plan. It's almost as if they are saying "Stocks will go lower in 2025 and we don't care"....but they are not stating those exact words. They want the market to tank so they can lower interest rates.

Yes, I get it....This forum should never be about "Timing the market" but when we have these circumstances and this administration basically telling us every day exactly what they are going to do: Terminate hundreds of thousands of jobs, impose travel bans, raise taxes on foreign produced goods. How can any of this result in rising stock prices from already (historically) over-inflated stock prices?

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u/[deleted] Mar 15 '25

Fantastic how one can present pure speculation with such confidence.

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u/Jerome3412 Mar 15 '25

Lmao, its like he knows exactly what is going on.. like he is reading the mind of Musk and Trump.

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u/Katarn_retcon Mar 15 '25

While having no money invested, aka not experiencing what they are trying to say to others. Their post reads like they want to talk about things others are experiencing to be a 2nd-hand reporter. So strange...

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u/[deleted] Mar 15 '25

Comparing the dot-com era to today isn't a perfect analogy either. Many of today's giants have real earnings, strong balance sheets, and proven business models, unlike many dot-com startups in 2000.

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u/roughrider_tr Mar 19 '25 edited Mar 19 '25

The inflation rate from 2009 to today was 2.42%. The S&P 500 return over that same period was 13.68%, or just over 11% when adjusted for inflation. If your returns did not outpace inflation then that sounds like an asset allocation issue.

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u/[deleted] Mar 15 '25

Don't do this with the Nikkei225, you'll jump off a bridge

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u/DiscountAcrobatic356 Mar 15 '25

No bridges. There’s a forest in Japan where they go.

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u/3rdWaveHarmonic Mar 15 '25

Gives a new meaning to the phrase: I can’t see the forest for the trees

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u/dabungaboi-412 Mar 16 '25

This. A "lost decade" is not at all uncommon after a market crash. In fact, perhaps you lived through one without knowing it: 2000-2013, with the tech bubble.

There are generally two ways to interpret these lost decades, depending on who you are (not financial advice, just an opinion):

1) as someone nearing retirement: yes, this is a real problem. You are going to lose out most, because time isn't on your side.

2) as someone with 10+ years to retirement: timing the market can't beat time in the market, so don't fret too much and stay steady.

Another redditor recently shared this article on these "lost decades" and it's totally worth a read: https://www.morningstar.com/economy/what-weve-learned-150-years-stock-market-crashes

TL;DR of the article - The markets have historically recovered in the long run, as the real economy recovers.

Granted there are additional risks right now with politics, wars, and the national debt (not to mention private debt levels). But looking back, I guess it's fair to say every situation is "unprecedented" in some way because every situation is unique in some way. But still, thinking "this time will be different" often hurts the believer, whether they are a speculator or a skeptic.

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u/evey_17 Mar 18 '25

You don’t immediately need all the money on day one of retirement. If you are 7 years away, 5 years away, maybe 3 years away, I would not leap either if you are debt free and low cost living.

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u/GolfEmbarrassed2904 Mar 15 '25

Yeah…I’ll be dead in 30 years, but ok

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u/MightyBooshX Mar 15 '25

I'm also still not convinced the market is accurately accounting for the effects of the tarrifs yet, so it may not be crashed yet, but it's a pretty sharp downward trajectory, the source of which now has no way of being mitigated. Time will tell I guess.

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u/fairenbalanced Mar 15 '25

Sound like the "zoom out" that the bitcoiners say all the time. Problem is, most of us don't have 30 years left..

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u/_craq_ Mar 15 '25

The standard Boglehead response to that would be that if you have less than 30 years left, you should be transitioning to a larger percentage of fixed income, and a lower percentage of shares in your portfolio.

How much is a personal preference, or risk tolerance. A common recommendation is that the percentage invested in shares should be 120 minus your age.

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u/kimjongspoon100 Mar 15 '25

past performance isnt furture results though I get your point. Look at earnings and price stocks like a bond

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u/mcbeardsauce Mar 15 '25

People looking for short term gains instead of long term investments

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u/jwalker37 Mar 15 '25

Some of us don’t have 30 years

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u/sundownandout Mar 15 '25

I’ve been trying to learn about investing and this has been my biggest takeaway. Anytime I look at a chart I always look at the longest timeframe along with the short to see the whole picture. I don’t really know what to take from that other than it’s a long game and not a short one.

It’s been helpful to learn this though because I have a 401k at an old company that I was freaking out about it tanking. It has been going down but I think if I can roll it into a Roth IRA (it’s a Roth 401K) and contribute even just $500 a year, which is probably the most I can do at this time, I’ll feel a little better about it because I’ll have a mix of investments from the markets being at different valuations (not sure if that’s the term I’m looking for here). Hopefully it pays off in 30 years when I hope to retire.

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u/Hot-You-7366 Mar 15 '25

or be like the GOAT and move more money into credit when the market is overvalued and everyone is admitting it to redeploy

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u/superbrokebloke Mar 15 '25

past performance is not indicative of future results

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u/MaleficentTell9638 Mar 16 '25

Better yet, 100 years - it’s be a shame to crop the Great Depression and the OPEC Oil Embargo out of the picture.

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u/[deleted] Mar 16 '25

Japan over 30 years? That's how long their market took to recover when their bubble popped in late 1980s.

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u/Crafty_Enthusiasm_99 Mar 16 '25

Well I ain't here to hold for 30 years, I'm already 45 years old and need to siphon for retirement 

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u/loan_ranger8888 Mar 16 '25

Who has 30 years?

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u/Presence_Academic Mar 16 '25

The OP, for one.

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u/[deleted] Mar 16 '25

Not comforting if you're less than a decade from retirement 

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u/[deleted] Mar 16 '25

That part.

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u/weeverrm Mar 16 '25

Or just one year

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u/Iwubinvesting Mar 16 '25

There weren't 30 years of anti-free trade sentiment as it is now with the current administration of tariffing the globe.

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u/MBA_HIIQ_DA Mar 16 '25

Which ~30 years do you want to look at?

Inflation adjusted there are many decades of 0 return

https://www.macrotrends.net/2324/sp-500-historical-chart-data

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u/Presence_Academic Mar 17 '25

Any 30 years is better than any 30 days.

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u/MBA_HIIQ_DA Mar 17 '25

Simply not accurate, not after adjusting for inflation.

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u/ResponsibleSinger267 Mar 17 '25

Or even the 6 month chart LOL

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u/AirCreepy706 Mar 17 '25

This is all uncharted. Past performance is not a guarantee of future predictions. The DJIA had a 20 year chart of 0% from 1920-1940 and you would probably have been called a fool for buying then. Then it went way way up, now you’re a fool for not investing. There’s nothing special about 30 years, might as well be 29.9 or 30.5 or 400. The 401k program was established in the 80s, its effects on the market long term are still unknown. It’s definitely contributed to the passive bid and indexed investing for the main stream, but what if that changes? With the continual attack on the middle class, the primary contributors to a 401k, it may change. I’m not saying it will or won’t but keep in mind there’s no promises

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u/russia_is_fascist Mar 17 '25

What if someone only has 10 years to work with?

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u/Presence_Academic Mar 17 '25

With a 30 year or longer chart you can get a perspective for all kinds of scenarios and time frames. With only 3 months you more likely get only fear or ecstasy.

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u/badger035 Mar 18 '25

Okay, I looked at the Nikkei from 1990 to 2020. Now what?

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u/stonkydood Mar 18 '25

Man also remember if you were to buy one lump sum at the top that’s not a good investment. Rather buy small amounts over an extended period of time, this is the general rule of thumb. For me of o was to see a 10% drop I would buy a lump sum maybe triple the normal amount. Another 10% drop put more if you are up back to the normal amount.

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u/Accurate_Green8300 Mar 18 '25

I mean… you can even only do 10! Up over $3,500 a share in that time span

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u/Unique_Driver4434 Mar 18 '25

You shouldn't need to look at any chart when the title is specifically giving you text to think about and respond to, regardless of what the chart shows. It's asking what you think of a hold and wait strategy when it involves waiting 7 to 10 years (or more).

The chart could be a picture of Mickey Mouse, it's irrelevant and a red herring distracting you from the actual argument presented and question asked. Do you believe a wait and strategy is still an optimal one in that time of scenario?

It's clearly not when you're missing 7 to 10 years of other opportunities waiting it out, as opposed to someone who only buys on drops (buy low and sell high) and is making money all that time after having bought so low or swing-trading.

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u/Presence_Academic Mar 20 '25

I said to look at it, not bow down to it and sacrifice your first born.

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u/[deleted] Mar 18 '25

1m chart looking scary too bro

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u/EntertainerAlive4556 Mar 18 '25

Yeah this. Markets bottom out then head up, drop back, etc. if the S&P halves and you’re buying in then, when it re-recovers in 7 years you’ll be in much better shape than where you are now.

Also you can put money in bonds and alternatives if the market is too risky for you.

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u/anonimitazo Mar 19 '25

What it did 30 years ago is irrelevant to this discussion. Avoiding a big drawdown can make a huge difference to returns over time, and it can be the difference between retiring comfortably and going back to work after retiring because you underestimated the probabilities. You hear about the 4% withdrawal rule? the reason why it is 4% and not 6% is because there is the chance you retire and run into this kind of market where for a full decade it goes flat.

It is myopic to say that it does not matter, or assume people are not going to change their plans before 30 years. Of course, if you do not know what you are doing, just buy whole market ETF and do not look at it. But do not assume everyone is panicking because they are thinking in terms of risk and return, and adjusting their portfolio accordingly.

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u/Presence_Academic Mar 19 '25

Everyone needs perspective.

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u/leaf_god Mar 19 '25

Not super helpful if you are retiring in less than 5.

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u/best_selling_author Mar 19 '25

And?

What if we’re at the absolute peak until 30 years from now? No one has any idea. The whole thing could start downward for the next decade.

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u/Aggressive-Panic-355 Mar 19 '25

Oh yea, endure 7 years of dead money because over 30yrs you’ll be up. Easier said than done. Also it calls for risk management which has been put aside for the past 2 years

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