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Buying stocks at the 3 worst times in the past 30 years still proved the best pl

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  • Buying stocks at the 3 worst times in the past 30 years still proved the best pl

    Buying stocks at the 3 worst times in the past 30 years still proved the best place to invest


    https://www.cnbc.com/2018/02/06/bespoke-paul-hickey-buy-dips-because-buying-at-past-tops-still-paid.html

     

  • #2
    To steal from Ben Carlson of A Wealth of Common Sense I wrote this one some time ago about the worst timing ever.

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    • #3
      This is a tautology when the market is still near all time highs. Don’t overestimate the risks involved with investing in equities, but don’t underestimate them either. Returns are not guaranteed even over long time periods.

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      • #4



        Buying stocks at the 3 worst times in the past 30 years still proved the best place to invest


        https://www.cnbc.com/2018/02/06/bespoke-paul-hickey-buy-dips-because-buying-at-past-tops-still-paid.html

         
        Click to expand...


        I agree with the message of not being spooked by the recent drop, but I think this is a bit of cherry-picking because we are currently at (near) all-time highs. I'm sure people wouldn't be comforted by this argument in March 2009 (the low during the financial crisis) if they bought at the top in 2000.

        -WSP

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        • #5
          If you don't have anything better to do with your money* and you plan to hold for a long, long time, low-cost index funds aren't ever really bad places to park cash. Even paying a 40% hype premium would be made back in 9 years at a CAGR of 4%. The underlying value of stocks, ignoring their prices for the moment, marches up year over year. Barring major catastrophe, that is.

          Speaking to the effect of increased stock prices on this analysis-- the Ben Carlson example gives a CAGR of 7%-- that rate would only decrease to 6% over the 30 year period if stocks lost 33% of their price at the last year of the analysis.

           

          * For instance, you don't have loans to pay off or alternative investments to make

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