Stop gambling.

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372565)

Turning 30 just got a lot scarier.

A coming collapse in investment returns means that people that age today will have to work seven years longer or save almost twice as much to end up with the same nest egg as those of roughly a generation ago.

So says the research arm of McKinsey & Co. in a new report that argues that investors of all ages need to resign themselves to diminished gains.

The consulting company maintains that the last 30 years have been a “golden era” of exceptional inflation-adjusted returns thanks to a confluence of factors that won’t be repeated. They include falling inflation and interest rates, swelling corporate profits and an expanding price-earnings ratio in the stock market.

The next two decades won’t be nearly as lucrative, even on the optimistic assumption that the world economy snaps out of its recent funk and resumes growing at a faster clip, according to the McKinsey Global Institute report titled “Diminishing Returns: Why Investors May Need to Lower Their Expectations.”

“We’ve had a wonderful 30-year period in terms of returns, way more than the 100-year average,” said Richard Dobbs, a McKinsey director in London. “That era is coming to an end.”

Bond investors have already reaped much of the benefits from declines in inflation and interest rates from the sky-high levels that prevailed in the 1970s.

Tougher Road

U.S. and European corporations, meanwhile, will find it harder to boost profits in the face of stepped-up competition from emerging-market rivals and from smaller businesses able to tap into the global market through the Internet, Dobbs said.

It’s not only 30-year-olds and other individual investors who’ll be hurt if McKinsey is right about the outlook. Pension funds and university endowments also have reason to worry, Dobbs said.

The roughly $1 trillion funding gap confronting U.S. state and local retirement plans could triple if McKinsey’s more pessimistic projections pan out, he said. U.S. college endowments could be out as much as $19 billion per year, he added.

Two Paths

McKinsey sets out two paths for the economy and financial markets over the next 20 years in its report. In the slow-growth scenario, U.S. gross domestic product expands by an average 1.9 percent per year, while growth in other major economies is 2.1 percent. Returns in that case are well below the average of the 1985 to 2014 period.

In the recovery scenario, U.S. growth matches the 2.9 percent average of the last 30 years while non-U.S. GDP rises 3.4 percent. Returns still fall short of the golden era when inflation and interest rates were falling and profit margins were expanding.

The McKinsey study focuses on U.S. and Western European stock and bond markets and doesn’t take investments in emerging markets into account, largely because of a lack of reliable long-term data.

“We are entering a period of much lower returns,” Dobbs said. “That’s going to have some quite extreme consequences for all types of investors.”

http://www.bloomberg.com/news/articles/2016-04-27/be-afraid-be-very-afraid-if-you-re-investing-for-the-long-run

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372621)

Date: February 18th, 2015 2:34 PM

Author: nutella

nutella has always had far less hubris than tmf but far more results.

nutella is more hated on here mainly because she keeps getting what wants and rubbing in xoxo's face, whereas nobody takes tmf's "multiple properties" aspirations seriously. people were definitely reveling in her unemployment, but now have to put up with her $400k in-house threading. now people are hoping for her hedge fund to crash.

i've come to realize that nutella is far less mean-spirited and angry than those attacking her. i've never seen her wish ill upon anybody and i highly doubt she cares if others do not want her lifestyle.

(http://www.autoadmit.com/thread.php?thread_id=2810899&forum_id=2#27341962)

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372774)

Wife and I still have like $575k in retirement accounts in the market, so it isn't like we are out totally, just felt we were too deep....

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372679)

Other than buying index funds during the dips, not sure how anyone should be timing the market, and $500K at once seems insane.

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372957)

Timing market - horrible underperformance in every study ever performed.

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372710)

Edit: I do occasionally time buys and will often purchase on dips (like in August and Jan). However the way I view cash I invest, it's not money I need for 10-15 years so once it's in there, I won't gamble and take it out thinking there's a correction coming.

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372737)

note that's just one savings account

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372567)

I would love a shitty bear market for the next year and a half

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30372769)

I told her to shut her fucking sludge spewing trap cuz standing in a soup line is a HELLUVA lot more uncomfortable.

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30473544)

There are exceptions: you don't have to dedicate you life to the stock market to learn how to buy a few dips.

500K you can move that in and out of an index fund with no problem. Like in a second. Fuck SPY could take a 500K trade with not a penny slippage.

Common sense. There is a bunch of shit out there that has gone up 5X or even 10X what it was in early 2009. Doesn't matter if it shouldn't have been that low. Shouldn't be this high either. Don't try to top pick this bullshit, but you need to understand that this garbage is just not worth what it's trading for right now. These are big stocks too, TJX, HD, DIS, SBUX, MCD. I could just go on and on.

These parabolic runs for the last 7 years WILL CORRECT and when they do this market will go down to at least high 1500's on SPX at a MINIMUM.

So you can bet your fucking panties on that shit. This market WILL FUCKING test that 2013 breakout area (1575 SPX) or so. This the the area that SPX cleared back from the 2000 and 2007 highs. In 2013 SPX broke these highs and has never spent a lot of time down there again. But it will, niqqa, you can bet that shit.

So do what you fucking will and hold the index funds, but you can get out now and buy back lower within 12-18 months. But you won't heed that advice either, because the next buy will only setup after we have spent months going down and everyone is bearish.

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#30506519)

I bought $20k total international yesterday which was clearly too early but sick of waiting. I'll put in $40k today and see what happens tomorrow.

(http://www.autoadmit.com/thread.php?thread_id=3209376&forum_id=2#33956888)