Lost Decade? I don't think so.

[The White Coat Investor]

I'm on David Phelps email list. He sends me a salesy email several times a week. Lately, they have contained a lot of fear-mongering preying a bit on people who are uncomfortable with the recent stock market downturn before the usual selling of his seminars/ideas/mentorship etc about optimizing your dental practice and investing in real estate. Here's the latest one:

 

Socialism to complete totalitarianism is on the way.

Freedom is being grabbed by the government at a rate not seen in our lifetime.

The national debt is out of control.

The stock market is dropping like a rock.

How are you protecting your family and your assets?

Do you have a Plan B?

Or is your head still in the sand just hoping…

I found it interesting to juxtapose that with this recent post from HomerJ on the Bogleheads forum: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=182894&p=2772878#p2772878

The money you invested in Jan 2001 - has made 5% a year - $10,000 invested is now worth $20,779
The money you invested in Jan 2002 - has made 7% a year - $10,000 invested is now worth $24,382
The money you invested in Jan 2003 - has made 9% a year - $10,000 invested is now worth $30,103
The money you invested in Jan 2004 - has made 7% a year - $10,000 invested is now worth $22,095
The money you invested in Jan 2005 - has made 7% a year - $10,000 invested is now worth $21,107
The money you invested in Jan 2006 - has made 6% a year - $10,000 invested is now worth $18,834
The money you invested in Jan 2007 - has made 6% a year - $10,000 invested is now worth $16,472
The money you invested in Jan 2008 - has made 7% a year - $10,000 invested is now worth $17,614
The money you invested in Jan 2009 - has made 15% a year - $10,000 invested is now worth 27,104
The money you invested in Jan 2010 - has made 12% a year - $10,000 invested is now worth $19,648
The money you invested in Jan 2011 - has made 10% a year - $10,000 invested is now worth $16,188
The money you invested in Jan 2012 - has made 11% a year - $10,000 invested is now worth $15,515
The money you invested in Jan 2013 - has made 9% a year - $10,000 invested is now worth $13,334
The money you invested in Jan 2014 - has made 2% a year - $10,000 invested is now worth $10,456
The money you invested in Jan 2015 - has lost 7% this year - $10,000 invested is now worth $9300

It isn't about timing the market, it is about time in the market. Stay the course. Those who invested in 2001, 2007, 2008 etc have done just fine. Those who invested in 2003 and 2009 did awesome. Don't miss the next 2009 by "going to cash" at market bottoms. If you want to invest in real estate too, that's great. More than one road to Dublin. Those who bash on other reasonable methods of investing that are well-known to be successful are probably selling something. I was listening to a Bigger Pockets (real estate) podcast with Clark Howard as a guest. He invests both in index funds and direct real estate (9 properties.) I was surprised to see that the very successful hosts on Bigger Pockets didn't even have a Roth IRA. Seems silly.

[PhysicianOnFIRE]

I finished residency in 2006 and started investing right away, mostly into a SEP-IRA.  The first 15 months, the markets were mostly up, but the next 16 months were downright ugly, with the S&P 500 losing more than half it's value,  I stayed the course, investing on the way down, investing over the drawn-out ride back up.

This "Nike swoosh" market has benefitted me much more than a slow, steady rise would have.  If we enter another bear market and recover before I retire, I'll be in even better shape.

 

[Zaphod]

Doesnt it always seem that way though? It seems like there is a very funny phenomenon in RE investing and personality where people tend to be splitters to a high degree. Every time I am reading something on BP and a commenter ever gets into "well if I index this instead"...its like a blood bath of dissent and the anti stock market. Even our resident real estate investing expert here goes to intellectually flimsy lengths to compel the value of RE investing. I dont get it, obviously you should do both if you can and they both have their pros/cons.

Maybe thats it, people only have so much money or their personality fits better with one type over the other. In RE I guess its far easier to amass what appears to be significant wealth on your balance sheet (even if 80% isnt yours) and the income generation is much higher up front than the market. Very interesting phenomenon indeed.

[jfoxcpacfp]

re: the Lost Decade, this 2012 Nick Murray article is a good accompaniment to your stats. Caveat: he puts in a plug for using a financial advisor at the end, which is not my purpose for uploading.