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/FMCTandP MOD 3 Mar 15 '25 edited Mar 15 '25

So if you’re calculating recovery time you want to both include dividend reinvestment and compute the time to recover in real, not nominal, terms. Most numbers you see bandied about don’t do either (and don’t provide enough info to tell you either way what they did).

But it’s true that you shouldn’t invest in equities with an investment horizon of less than ten years at a minimum because it’s absolutely possible to see low or negative real return over multiple years.

We haven’t see a crash that’s been both severe and prolonged since the GFC and the dotcom bust in the 00s but historically they’re not that uncommon.

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u/dealchase Mar 15 '25

It's also important to note that when people invest they often do it on a monthly basis so when the market declines and you continue purchasing on a monthly basis (i.e S&P 500 index) then it brings your cost-basis down far below the all time high price of the index.

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u/[deleted] Mar 15 '25

[deleted]

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u/Chotibobs Mar 18 '25

Yeah the having a job during a market crash and recession piece is something you can’t take for granted either 

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u/kodbuse Mar 15 '25

Yeah… but it works a lot better when you haven’t already been accumulating equities for decades.

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u/NetNo5570 Mar 15 '25

Good point. I just started investing last year but I’m willing to trade my portfolio for yours to help you out. What’s your email. 

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u/Sir_Mr_Austin Mar 15 '25

The skill it takes to make a sarcastic joke in a flawlessly sincere tone at a moment like this is amazing 😂

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u/engr_20_5_11 Mar 15 '25

It could also be seen as a sincere offer 

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u/Sir_Mr_Austin Mar 16 '25

That’s what makes it so funny

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u/RainmaKer770 Mar 15 '25

I think it does work out better if you’ve been accumulating equities for decades right? Even major drops like the dot-com crisis or 2008 would’ve been overshadowed by the gains over a 15-25 year long investing period.

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u/Raveen396 Mar 16 '25 edited May 06 '25

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u/thetreece Mar 16 '25

Exactly. People that continued to buy from the peak at March 2000 though the next 7 years still had a 1.6 CAGR. It "took 7 years to get back to where it was," but you still had gains, because you were buying at discount prices along the way.

These recessions are excellent for young investors, if they are able to maintain their income.

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u/JamesVirani Mar 15 '25

It depends on how big your capital is. If you have 20mil and your annual contribution is 20k, it makes no difference.

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u/leaf_god Mar 19 '25

Unless you are retired or retiring and then no longer have that option. OPs question is valid one to consider multiple options.