Sounds good. Doesn't the stock market usually bottom out before any recession starts? Once there is a recession officially declared stocks have already had a huge run up from the bottom.
that's not what the data shows. in fact it shows the opposite of your conclusion. it shows that active stock picking and trying to time the market by individual investors is a fool's errand so investors should just buy low price tax efficient broad market index funds whenever they have the money to do so preferably on a long term regular basis and never sell.
stocks are generally a leading indicator by about six months. for a long recession (longer than 2 quarters or six months) what you write may not be true. but it is true that once a recession is "over" stocks have generally been rising for months.
If you wait for the trailing "official recession" notification. you are right. But the recession is in the news in real time, it's there for anybody to observe. The final timing indicator was given by the :Smiler" at the beginning of It's A Mad Mad Mad Mad World.
There are lots of folks that are very good at timing the market. They are traders, not investors, and have vast knowledge in technical analysis, position sizing and trading strategies.
alpha exists, but after costs of obtaining said alpha, it disappears. on average the universe of actively managed mutual funds underperforms the market by about the total of their expenses, which mathemathically is the only possibility.
Good point, but being from high property tax states, we never made much profit. at least stocks/bonds returned dividends/interest
Yeah, I don't know where Bill comes up with these "facts" he spews, but it is entertaining!
| AGE | AVERAGE BALANCE |
|---|---|
| Under 25 | $7,351 |
| 25 to 34 | $37,557 |
| 35 to 44 | $91,281 |
| 45 to 54 | $168,646 |
| 55 to 64 | $244,750 |
| 65 and older | $272,588 |
| Age Range | Median Net Worth | Average Net Worth |
|---|---|---|
| 55-64 | $212,500 | $1,175,900 |
| 65-74 | $266,400 | $1,217,700 |
| 75+ | $254,800 | $977,600 |
The author of that article title has an interesting definition of "lose money". Right in the article, it states:Why 90% of Stock Market Traders are in Loss?
It’s a shocking statistic — approximately 90% of retail investors lose money in the stock market over the long run. With the rise of commission-free trading apps like Robinhood, more people than ever are trying their hand at stock picking. Unfortunately, the vast majority are learning the hard way that investing is harder than it looks.
I've wondered how long it would be before someone would come out and just blast that "90% lose" comment, because I was 99% sure the "90%" meant underperform. And that is just one level of the inanity of the comment. It is the most important level since it is just plain wrong, but not the only level of mis-understanding. For that to be true, there would probably have to be 50,000,000 accounts out there day-trading options and always losing on the time decay and the transaction cost.The author of that article title has an interesting definition of "lose money". Right in the article, it states:
So, according to your great sources, when an investor underperforms the broader market, that is considered a "loss".
Do you realize how ridiculous that is, Bill??? So let me get this straight, if an investor's stock portfolio gains 24%, but the broader market gains 25%, you consider that a "loss". You have absolutely zero credibility, and so does your so-called sources.
Bill also wrote:
Do you have any proof or data that backs up your claim that the average person contributed even close to the "max amount for an employer match for decades"??? Also, how did that average person invest their 401k funds? If they only put it in the default money market account, which earned close to 0% for the good part of the last decade, don't you think that makes a big difference in the size of their 401k fund?
There are just too many variables to make any conclusions based on that average 401k fund size. For example:
And those are just a few of the variables. Again, you are trying to make some grand conclusions that most people lose money in the market, when you have zero proof.
- How many years did they actually invest?
- What percentage / amount did they contribute?
- How did they invest their money?
- Did they try to "time the market" with their investing?
- Did they take out loans against their 401k over the years?
I said it before and I'll say it again: at least your posts are entertaining due to the ridiculousness of them!
Kurt
The author of that article title has an interesting definition of "lose money". Right in the article, it states:
So, according to your great sources, when an investor underperforms the broader market, that is considered a "loss".
Do you realize how ridiculous that is, Bill??? So let me get this straight, if an investor's stock portfolio gains 24%, but the broader market gains 25%, you consider that a "loss". You have absolutely zero credibility, and so does your so-called sources.
Bill also wrote:
Do you have any proof or data that backs up your claim that the average person contributed even close to the "max amount for an employer match for decades"??? Also, how did that average person invest their 401k funds? If they only put it in the default money market account, which earned close to 0% for the good part of the last decade, don't you think that makes a big difference in the size of their 401k fund?
There are just too many variables to make any conclusions based on that average 401k fund size. For example:
And those are just a few of the variables. Again, you are trying to make some grand conclusions that most people lose money in the market, when you have zero proof.
- How many years did they actually invest?
- What percentage / amount did they contribute?
- How did they invest their money?
- Did they try to "time the market" with their investing?
- Did they take out loans against their 401k over the years?
I said it before and I'll say it again: at least your posts are entertaining due to the ridiculousness of them!
Kurt
