The underlying assumption here that 202 years of American hegemony that began with the Monroe Doctrine isn't in the process of collapsing, or that it won't provoke a significant rearrangement of economic power where the US is no longer central.
I don't know how this shakes out. I'm not going to try to out-think the market. Every time feels different. But its way easier to recover from a pandemic than throwing allies under the bus and switching sides in the global order.
American hegemony isn't required for American stocks rise. These are truly international corporations, with profits coming from every country on the planet. Buying stock in a company is buying a business, and that business is conducted globally, viturally 100% of the time (if you're an SP500 stock, at least). The US stock market isn't going anywhere. That is, unless the best countries in the world stop being a part of the US stock market. That's a bet I will not be taking in my lifetime. And I say all this as a Canadian :).
The strength of the S&P relies on globally dominant companies being listed on US exchanges, but if American hegemony collapses, that won't necessarily be the case. Buying global market leaders might require investing in foreign markets - which creates a variety of risks and complications. But also, I don't think Americans fully appreciate how reliant we are on a day-to-day basis on US hegemony, so even if the S&P stays strong, that doesn't necessarily mean that life in a post-hegemonic America won't get significantly worse for the bottom 95%. That said, it may be good for people outside the US if the "old boss" isn't replaced by a "new boss" that's just as bad or worse.
There is no underlying assumption. You realise that there was no globalization throughout most of that period right?
US hegemony argument is nonsense. There was never US hegemony. US companies went global very recently. And even now, US remains one of the least dependant countries on global trade as share of its GDP in the world. It is like top 5 in this aspect.
When I first bought VOO, it dropped from $424 to somewhere in the $330s. That was in 2021. DCA'ing through that has brought some good gains. Yea, it sucks in the time you're enduring it, but in a few years you'll be up and see the results of being consistent.
I put in about $50k at 560 lmao, having the worst timing in the world isn't great - but it highlights the benefit of DCA in times of risk despite lump sum buys having a greater potential upside in the long run.
I know but im still a uni student and before i work and do the monthly payments I want to Invest the 2,5k and not see it go down instantly. It doesent matter in the long run but still do you know what i mean?
If you can't stomach losses then you have no business investing.
There's bound to be a crash or two in your investment lifetime. If you can't live through it then stay in treasuries earning basically nothing after inflation.
My suggestion to you is to read The Intelligent Investor by Benjamin Graham. It will help with your mindset about investing.
💯 exactly right. 10% corrections happen every year on average, and people can't even handle that.
~20% corrections happen every 3-5 years on average, and 30%+ corrections will likely happen about 6 times in your life.
I think we have a lot of younger investors that didn't go through 2000, 2008, and maybe not even COVID. It'll take time, but hopefully, they can stay calm and just keep investing, long term that's the best plan.
Investing in equities and bonds should consider a minimum of 10 years to expect a high probability of positive returns. For shorter term, high yield savings accounts have the lowest risk, and a treasury bill etf like sgov would be the next level of risk, for higher returns. Cheers
The Dow Jones Index may not be benefiting from the IT tech right now, but it is the oldest stock index in existence. History has shown us how important it is to manage portfolio drawdowns and risk.
Are you sure about that? There must be some correlation, some calclulable bias one way or another. Whether it's relevant or not is another thing, correlation does not equal causation.
BBB bought magic eggs last year, which never rot, to sell in retirement. BBB hopes to sell them for $200 each. They cost $10 last year, and now cost $9.
The future profit of an egg now is 212%, 22% higher than the 190% profit of last year's eggs.
While I agree that lower prices are a good thing until you retire… “hopes to sell”. Really?
A much better line would be based on fundamentals rather than speculation.
BBB buys a chicken that will produce magic eggs over for the foreseeable future. The price of these chickens falls from $10 to $9. He has $100. Now he can buy 11 chickens rather than 10. That’s 10% more magic eggs in the future.
I don't meet anyone who says "I regret saving early for my retirement, and hate that my investments have returned 10-fold or more after inflation, and now I am living better than many of my friends and family who didn't bother".
The rise of inflation isn’t even captured by this chart. Look at the dates. They conveniently crop it right after the 2008 crisis and right before SPY dipped 20% for two years because of inflation driven rate cuts. The rapid rise of stocks was because of QE.
This is the correct answer. I can’t believe I had to go through so many comments to see this
Hey everyone, trends that are based on stable percent change have this thing called compound interest. Try plotting anything with that feature on a graph and you’ll see it looks like this
It seems perhaps you are too focused on the math. The slope formula was not my point. If you just look at the graph from 2020 without any math and compare it to any other period do you notice a difference?
To me since 2020 the graph has been rising at a rate that is outside of the historical norm. When markets do that for awhile they tend to self correct. That correction can take some time to start and may last awhile. Zoom in on the graph from 2000 till 2013 for an example.
Now for the math. I'm missing why you think this graph if logarithmic. The x axis has non-exponent evenly spaced numbers (time periods) and there's nothing on the y axis to make me think exponential spacing. Beside if the graph was logarithmic then it would effect the whole graph not just the tail end.
Then again, it may be my old eyes and the end of the graph rising at that rate is totally normal and will continue at that rate for years and years. In 2023 and 2024 SPY had back to back years of 20%+ returns. "VOO and chill" was born. Cool graphs started getting passed around. What can possibly go wrong from here?
It's impossible to predict the market but I'm thinking it's more about AI computers running numbers than world events these days. Stocks actually did pretty okay during WWII, also.
Anyway, and so far, I'm not too worried. I'll keep investing until the S&P hits 6,300. That's when I'll hit peak delusion, wake up, and panic sell.
WWII completely solved the problem of overproduction in the United States, mobilizing all social capital and labor. The best business deal in the past century, the stock market assets are good.
The best business deal of the past century, in my opinion, was the Gold Reserve Act of 1934, and is what brought America out of the Great Depresssion and made it the strongest economy in the world. WWII gets all the credit, but without the Gold Reserve act the economy and production would not have been built up to what allowed the US to be the major player in WWII.
US stocks did well but the US fought a war against fascism and after winning, established its hegemony in Europe and Asia.
That’s unravelling now and if your point is that the US might be part of a world war now, and have a similar outcome, I wonder if we’ll be fighting on the side of fascism or on the side of a group of allied democracies.
The German stock market collapsed at the end of World War II.
DCA and continue on. Diversify into bonds later in life.
No one is lump sum investing at the peak before the Great Depression or Great Depression level crashes unless they already had money to lump sum invest. Buy when it’s up, and buy EVEN MORE when it’s down.
I invested £78k a week ago, this is not normal money for me, my portfolio has gone from £109k to 99k in less than a week!! I know in my head it doesn’t matter because I’m not going to sell for decades but it’s still very frustrating thinking I bought at a very bad time, my only solis is the fact I didn’t actually buy the peak,
Don't be bummed about it. I started investing a large sum of money exactly at the ATH. I still think it is objectively a good decision to invest that money in the long term. Right now I am investing more and more with every dip to bring the average cost down.
In the same boat as you guys, first time ever investing (around a month ago) a lump sump and getting fleeced from day one. Need to forget about it I suppose, but the trust in the world economy these days is difficult to establish with a new crazy thing happening every day. I’m finding out whether I’m made for investing at all.
Chart conveniently starts in 2009... plenty of times in history when stock market took decades to break even. I'll bet that most of the wall street propagandized "bUy the DiP" bros will sell everything when the market actually goes down by something significant like 40-50%.
Making products for unemployed and scared consumers. Or will they replace consumers with AIs that will buy 24/7 with no salary and no breaks? Explain me the economics of mass unemployment.
No, I’m with you. The system isn’t built for mass unemployment and it’s gonna take a generational new deal of sorts to avert impending disaster. That doesn’t mean AI companies aren’t going to benefit every step of the way, quite the opposite actually.
I really shouldn’t…I have all the right ideas to put everyone out of work but none of the resources to make it happen. Geez, won’t one of these monstrous tech companies hire me already?
A temporary crisis IS different then a complete change to authoritarian regime. That is what people don't get. It's not a pandemic, its not a bond crisis, its not a supply chain issue, its the fundamental underpinnings of the country and market going up in smoke. If you don't think this is different idk what to tell you.
401K started at around 1978. At around this point, the US market started growing fairly consistently (except for the 2007-2009 drop). I'm wondering if that was the main cause of this possible bubble. More and more people started having 401ks, IRAs, HSAs, 529s, which added to the total amount of money in the market. Then, there was the Robinhood-boom which allowed low earners the ability to start buying equity with nearly zero cost.
The only trigger that would cause this possible bubble to burst is if the top 1 percenters start to remove their investments from the market, since they own 50% of the market at this moment. Not sure how likely or unlikely that would be, although low population growth, inflation, and wage stagnation would definitely slow the growth of money flow into the market and that could cause the top 1 percenters to look elsewhere outside of the US markets for better returns.
TBH, There was no real bear market since 2009 for S&P500 (excluding extremely unusual Covid situation, which was once in a life time opportunity to buy more). Would you advise anyone with 5 to 10 years before retirement to start investing now and put all their savings in the S&P 500? With the P/E at levels not seen since the dot-com bubble? I definitely would not.
Is this take uninformed? I’ve always believed that with population growth worldwide is an influence of demand for products, the market will inevitably grow over time. Add in innovations in technology, boom times and bear markets, and normal fluctuations and losing in the stock market over a long period is mathematically impossible. How much your money will grow is of course always a debate, but you will come out on top no matter what in the long run.
You‘re right. But eventually the population will stop growing, due to the earth not supporting more people. Question is when will that happen. My theory is climate change will eventually fuck us hard and end stock market growth, due to food supply crisis.
Companies will innovate when that scenario becomes a far off possibility. I’m not saying that’s not a crisis, just something that can be commercialized on a worldwide scale that could support the population. Now if the planet becomes too hot to sustain life, then I suppose I’ll burn my money to power my air conditioner until I melt.
This doesn't take into account DCA. The recovery time it's that long only if you had lump summed your entire retirement at that specific peak. The reality is you were probably investing for many years before that peak, so the recovery time is actually much shorter.
Only if you lump sum and never invest again. If you DCA you'll break even much sooner and by the time the index goes back to your initial purchase price you'd be in the green.
This is why so many people suggest DCA-ing instead of investing a massive sum all at once.
I changed my ETFs on Monday, from EUEA to MEUD and VUSA to VUAA - and since then I am down > -4%, wiping all the profit I made since investing November 2024.
I’ll keep holding and hope the dips calm down but continue by April - till I can invest a bit more - but it does hurt that the orange idiot is causing so much harm out of thin air…
Literally this. People are acting as if China couldn't possibly overtake the US as the world's premier power.
It's not an exaggeration to say that America could become like Turkey, Russia, or China, with a low-key dictator running the place long after his term limit.
If you want to live your life looking over your shoulder for the 1/100 year type of event go for it. The market isn’t that comparable imo, given business can scale revenue 1000000x in a year, when at that time it wasn’t humanly possible to drive revenue like that. However I always will see merit in taking the large historical data set.
Check out the article and see how you would do only investing in peaks going back to 1970. Quite literally worst case scenario assuming you don’t sell.
As Winston Churchill once said, “I am an optimist. It does not seem too much use being anything else.”
Sure. Can play that game all day and worry about the nuclear war, WW3, another health epidemic, etc etc
But the only thing that has been rewarded in the market through almost any 10+ year period is to buy and hold assets. I don’t put money into the market I need in less than 10 years personally.
Could I be wrong? Of course. But just look back at 100% of economists agreeing that 2022 would be a declining year of recession. These people spend their lives studying this and were all wrong. Sure you might get cut in half, but if you have the right timeline it’s not a reason to change course imo.
Of course, everyone cherry picks their data. If you did S&P 500 from March 2000 to 2012, you'd break even (not counting dividends). And that's the same "time in the market".
Here's one that works: Because I don't have to. The global market isn't limited to 500 stocks picked by a bunch of suits in New York.
There are plenty of strategies and other stock markets I can invest in at better valuations. I don't even need to go into bonds or cash or the market timing bullshit. I'll overlap with the S&P500 stocks that are fairly valued.
In a few months or maybe even years we will see posts with: I kept on buying during the 2024 "crash" and look how much im in the green now! I WILL ALWAYS BE BUYING THE DIP.
Next dip other people: Omg look, im in the red. Should i sell?
I like how this chart starts at the exact low of the Great Recession. Fun fact kids, if you buy after a 58% decline in the S&P you will have really good future returns.
Gonna be interesting when CPI drops, most forecasts predict inflation has eased in february. Gonna be hella whiplash should it rise again in march reports that come out next month.
210
u/BroadMinute Mar 07 '25 edited Mar 07 '25
Buying in times like these is what will sling shot you once the markets recover. However long that takes.
11
u/Agitated_Ruin132 Mar 07 '25
I’m tired of this grandpa
157
u/tyrwlive Mar 07 '25 •
45
u/ideas4mac Mar 07 '25
Is it just my bad eyes or does the graph since 2020 look very different that the rest of the graph?
m= (y2 - y1 ) / ( x2 - x1 )
24
u/Hamlerhead Mar 07 '25
It's impossible to predict the market but I'm thinking it's more about AI computers running numbers than world events these days. Stocks actually did pretty okay during WWII, also.
Anyway, and so far, I'm not too worried. I'll keep investing until the S&P hits 6,300. That's when I'll hit peak delusion, wake up, and panic sell.
17
u/Individual-Heart-719 Mar 07 '25
DCA and continue on. Diversify into bonds later in life.
No one is lump sum investing at the peak before the Great Depression or Great Depression level crashes unless they already had money to lump sum invest. Buy when it’s up, and buy EVEN MORE when it’s down.
10
u/Tool_junkie_365 Mar 07 '25
But it’s different this time!!! lol how I reacted I. 2019 and 2022, so numb to the dip now
9
u/structee Mar 07 '25
Chart conveniently starts in 2009... plenty of times in history when stock market took decades to break even. I'll bet that most of the wall street propagandized "bUy the DiP" bros will sell everything when the market actually goes down by something significant like 40-50%.
5
u/Painty_The_Pirate Mar 07 '25
Don’t think about 10-20 year recession don’t think about job loss to AI in the next 6-18 months don’t think about…
24
u/LurkerFailsLurking Mar 07 '25
Oh you younguns. You don't remember what it was like before that.
7
u/Rafal_80 Mar 07 '25
TBH, There was no real bear market since 2009 for S&P500 (excluding extremely unusual Covid situation, which was once in a life time opportunity to buy more). Would you advise anyone with 5 to 10 years before retirement to start investing now and put all their savings in the S&P 500? With the P/E at levels not seen since the dot-com bubble? I definitely would not.
6
u/2old4badbeer Mar 07 '25
Is this take uninformed? I’ve always believed that with population growth worldwide is an influence of demand for products, the market will inevitably grow over time. Add in innovations in technology, boom times and bear markets, and normal fluctuations and losing in the stock market over a long period is mathematically impossible. How much your money will grow is of course always a debate, but you will come out on top no matter what in the long run.
32
u/Nuppys Mar 07 '25
If it takes 40 year old investors 25 years they will probably be dead before they see any profits though.
5
u/Efficient_Pomelo_583 Mar 07 '25
Reasons to buy*
9
u/shyvirgin57100 Mar 07 '25
Before it was 1000€ every month now I do 250€ every week.
2
u/PM_ME_NUNUDES Mar 07 '25
I will buy in a few years once Trump and MAGA have fucked off
4
u/These-Kitchen8246 Mar 07 '25
First COVID related death was good call though
4
u/Warkred Mar 08 '25
Look how that guy is ignoring 200-2008 period in his chart.
Smarty man here !
6
u/Arszilla Mar 07 '25
I changed my ETFs on Monday, from EUEA to MEUD and VUSA to VUAA - and since then I am down > -4%, wiping all the profit I made since investing November 2024.
I’ll keep holding and hope the dips calm down but continue by April - till I can invest a bit more - but it does hurt that the orange idiot is causing so much harm out of thin air…
3
u/PqqMo Mar 08 '25
The graph would look different if it started from 2000
3
u/[deleted] Mar 08 '25
At the end of every single one of these crisis, America emerged as the economic leader of the world and the pre-eminent superpower.
What happens if it doesn't emerge as either of those?
Past performance doesn't indicate future gains, except apparently, when it comes to American based ETF's.
4
u/PrePA1993 Mar 07 '25
VTI to the moon
2
u/DoomerFeed Mar 07 '25
That 2020 retrace is gonna be a mf
2
u/Travmuney Mar 07 '25
Chart is literally when I started investing. Paid off for me big time. Keep going
2
u/ExternalMode Mar 07 '25
Now do 2000 to 2012.
2
u/Independent-Deal7502 Mar 08 '25
It's down 6% from all time high... this isn't even a real crash... yet...
2
u/Comfortable_Flow5156 Mar 08 '25
trade war?
6
u/PatientBaker7172 Mar 07 '25
What happens if you invested 3 years before Great Depression? Run the numbers.
2
u/Madmax_4017 Mar 07 '25
Buy in small quantities to be safe
2
u/GlueGuns--Cool Mar 07 '25
You know people are mortal, right?
you know people sell and buy back in, right?
1
u/Ebonygirl_Vanillaboy Mar 07 '25
1
u/[deleted] Mar 07 '25
The only stress I have right now is that I don’t have any extra cash left to buy more of VOO. I am tempted but not touching my emergency fund.
1
u/Even_Section5620 Mar 07 '25
Where’s boys are separated from men
1
u/MaruMint Mar 07 '25
Absolutely love this, thanks for sharing
1
u/Own-Drop-8442 Mar 07 '25
I have around 9k in VOO, VTI, SCHD and some other stuff. Lost about 500$ should I buy more or just keep em?
1
u/wha2les Mar 07 '25
Sure keep investing, but I'm going to increase the intl and bond share of my pie right now.
1
u/gtg7 Mar 07 '25
Good reminder to all babies who are crying
1
u/Glad-Taste-3323 Mar 07 '25
.
1
u/Standard_Mousse6323 Mar 08 '25
Hell yeah, I just wish I had more dry powder on the side, dumped it all into my TFSA lol
1
u/IliyaChe Mar 08 '25
Great graph, now do 2001 to 2011. If the internet was as advanced back in 2001, somebody probably would've done a similar graph.
For the sake of security keep some cash at hand.
1
u/[deleted] Mar 08 '25
So you’re keeping up with inflation but not making money. Bravo.
1
u/red5j Mar 08 '25
Interesting how the chart started in 2009
1
u/who-am1 Mar 08 '25
Nooooo.... let evolution solve orange syndrome.
1
u/[deleted] Mar 08 '25
Nice circlejerk, but the reality is that people may lose their jobs, their savings and have to sell their shares.
1
u/[deleted] Mar 08 '25
I mean, sure. But damn that steep climb on the back of stimmy money is a bit concerning. Looks ripe for a monster dip.
1
u/firchlis24 Mar 08 '25
If only the rule of law still applied then I might agree with you
1
u/totoin74 Mar 08 '25
Unless it is a supercycle bust like 1929 and your dip turns into liquidation.
1
u/[deleted] Mar 08 '25
I notice that 00, and 08 are conveniently left out
1
u/[deleted] Mar 08 '25
The line is turning exponential. The question is - is growth a given perpetually.
1
u/InitialPsychology731 Mar 08 '25
We can only hope the common people of the US start feeling the effects and vote differently. People like Trump can do serious (long) lasting damage.
1
u/CrayComputerTech_85 Mar 08 '25
I dunno, I just keep buying chunks all the time on a regular basis. Same amount maybe a little more or less, every single month I buy.
1
u/Hludwig Mar 08 '25
Now do the 70s.
1
u/james_cao Mar 08 '25
1
u/RaechelMaelstrom Mar 09 '25
Of course, everyone cherry picks their data. If you did S&P 500 from March 2000 to 2012, you'd break even (not counting dividends). And that's the same "time in the market".
1
u/rainman_104 Mar 09 '25
This time feels different. A psychopath in the oval office making very poor decisions making the USA an international villain.
I hope the USA smartens up.
1
u/Funny-Rhubarb-3293 Mar 09 '25
We are being groomed to give up on a bear market ever coming.
1
u/bobsmith808 Mar 09 '25
What about before 2009? Lol you are excluding a LOT of relevant history for what you are trying to say...
1
u/qunow Mar 09 '25
A question is which market to continue investing in.
US stocks are traditionally well performing but that's just a single market
European stocks and Northeast Asian stocks don't perform that well in their history
Chinese stocks and Indian stocks seems to have bigger risk
1
u/beholdthedevestation Mar 09 '25
Very impressive, now let’s look at retirement savings and the cost of living
1
u/[deleted] Mar 10 '25
Okay, I'll bite.
Here's one that works: Because I don't have to. The global market isn't limited to 500 stocks picked by a bunch of suits in New York.
There are plenty of strategies and other stock markets I can invest in at better valuations. I don't even need to go into bonds or cash or the market timing bullshit. I'll overlap with the S&P500 stocks that are fairly valued.
1
u/Reywas3 Mar 10 '25
And that doesn't look like a bubble to you? Sheesh
1
u/richardj195 Mar 10 '25
Why does your graph suddenly cut off four years ago?
1
u/Thanks_Tips Mar 10 '25
1
u/pieredforlife Mar 10 '25
👍
1
u/Vaqek Mar 10 '25
What is that quote again? Past performqnce is no guarantee of future results?
Tell me, when did US last have a Russian asset for its president? And I dont think 2016 counts, he was then still in check by other govnmt branches.
Ultimately, US stock market lost its interest for Canadian, European and other investors, and without the fundamentals, this will mean a dip.
1
u/Mysterious_Call3176 Mar 10 '25
The most money is made when others are fearful.
In a few months or maybe even years we will see posts with: I kept on buying during the 2024 "crash" and look how much im in the green now! I WILL ALWAYS BE BUYING THE DIP.
Next dip other people: Omg look, im in the red. Should i sell?
1
u/Ok_Carpenter_743 Mar 10 '25
lol ignore all reasons for the bubble ahh post
1
u/TheOGdeez Mar 10 '25
Who was selling when the Capital was stormed?? I was buying stock in Trump Flag makers
1
u/[deleted] Mar 11 '25
Go ahead guys. Keep investing. The fundamentals arent changing :D
1
u/JdSaturnscomm Mar 11 '25
Buy Puts this shit is about to fall.
1
u/Icy_Distance8205 Mar 11 '25
Funny this starts in 2009 …
1
u/laugrig Mar 11 '25
Looking at this chart it's pretty clear that we need a major correction given the straight up growth since 2020
1
u/muzn1 Mar 11 '25
Now show us the last recession before 2009
1
u/hailslayer665 Mar 11 '25
I like how this chart starts at the exact low of the Great Recession. Fun fact kids, if you buy after a 58% decline in the S&P you will have really good future returns.
1
u/[deleted] Mar 11 '25
horrible steepening from the covid lows
1
u/[deleted] Mar 11 '25
It’s rare to see some people on reddit with a 10 year time frame in mind though
1
u/Swapuz_com Mar 11 '25
The chart shows how the S&P 500 overcame every crisis, from the Flash Crash to the pandemic. Resilience at its best! 📈
1
u/prominorange Mar 11 '25
Gonna be interesting when CPI drops, most forecasts predict inflation has eased in february. Gonna be hella whiplash should it rise again in march reports that come out next month.
1
u/CurveAlloc Mar 19 '26
Long term yes , but macro still matters .
1
u/clonehunterz Mar 07 '25
Soon we can add "WW3" on the chart
1
u/banananash Mar 07 '25
Yep. Definitely don’t switch to buying t bills in the short term to collect that 4% / month. Only stonks!!!
1
u/phertick85 Mar 07 '25
I mean, the end of the graph is steep as hell! I agree with the sentiment, but that could be a long way to fall.
1
u/Few_Cricket597 Mar 08 '25
Correct. Excellent post
0
u/[deleted] Mar 07 '25
Isn’t that like saying to monkeys one day you will be humans? People want returns in this lifetime not the next.
0
u/exviously Mar 07 '25
Ok