How’s that for a descriptive, thoughtful post title. It is the result of about three hours sleep and a 5 AM start. I haven’t even had a chance to write my weekly post on Mgoblogging blasting coach Sherrone Moore.
I agree with this about the stock market and Trump. Nothing goes up forever and it is time to manage greed.
It has been a rough three years for those of us who were counting on that constant 10% a year as income. My main accounts spanning 30 years is up 10.3% at the moment. It was over 11; about 2 years ago before the start of the current recuperation, it was below 10. That is the risk in investing in stocks, especially high-risk ones like small caps, technology, and international. Some of my long-time well-performing funds are still down over the past 3 years.
Now a few of my better performing funds–blue chip and communications and technology, T. Rowe Price) are up over the past three years; Capital Appreciation was up most of the time. The S&P is up 10.3%/year compounded over the past 3 years, which is average to modest. However, that same S&P is up 32.9% over the past year; a couple of my funds are up near 50% in the past year, a rise that is unsustainable. Trump is not going to move it forward in any appreciable amount.
Despite the lack of growth and even losses in certain categories, while they are still the best investment bets for the near term, they are not going to propel a major bull market on their own. And some of the major large-caps are up massive amounts and are at unrealistic highs.
Nothing goes up forever, even among the downtrodden.
I have been selling for a while, investing in bonds whose future looks bright, and balancing toward more stable investments like Capital Appreciation and value funds, and cash, which is still earning 4.5%.
This gets me to the professed wisdom and advice portion of New Post. When you look at what is promoted as 5-year growth that is compounded annual average return. It factors out fluctuation and growth stocks, in whole and in part, go up, and then down, and sometimes up again. Over the long term there is no better return. But quite possibly it is best to look at a chart of annual calendar year returns; some go up and down and others are still with risk fairly steady. That steady return and wealth building is arguably better in a life-living situation: if you want to use it you have to have some ability to predict or control it.
Me? I learned I have been investing in percentage statistics rather than focusing a particular asset or fund on growth. Now that I want to control and spend it I cannot do that, even though it has grown about as well as I could have expected.
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