1972-1992 includes the 1972 46% bear. It won’t be CAPE 35+ after that. So yes repeating 1972 would turn your current $300K into $1.8M.ivgrivchuck wrote: ↑Sat Jan 22, 2022 4:16 pmIt really seems that we don't understand each other at all.nigel_ht wrote: ↑Sat Jan 22, 2022 3:31 pmSo $300K in US TSM.ivgrivchuck wrote: ↑Sat Jan 22, 2022 1:21 pmThe target is 80%/20% stocks/cash, U.S./non-U.S. 50%/50%. Currently I'm a little bit under target (74% stocks) after hording I-bonds (I couldn't resist the 7% rate when stock prices were sky-high). Portfolio size around $750k.nigel_ht wrote: ↑Sat Jan 22, 2022 11:45 amWhat’s your current portfolio?ivgrivchuck wrote: ↑Sat Jan 22, 2022 11:05 am I am hoping for a market crash.
As an accumulator in my late 30s, that would mean that I could finally buy fairly priced stocks.
I am not hoping for a crash that results in a deep recession. That would benefit nobody...
The longer the better.How long of a “buying opportunity” do you want?
In the dream scenario, stocks would now go down as much as possible without causing a severe recession (40%?). Then the valuation would stay low for the next ~15-20 years and 5-10 years before my retirement they would raise back to high valuations.
Obviously I hope that the earnings will keep growing, but stock prices on the market to stay low...If you are in your late 30s with $500K+ why do you want 10 years of 0% real growth? So the $300K or so you invest over the next decade is “discounted”?
In just 10 years, using a fairly boring 1975 to 1985 market that $300K would have turned into $1.3M ($650K inflation adjusted)
https://www.portfoliovisualizer.com/bac ... ion1_1=100
Using 1972 to 1992 it would have turned into $2.8M ($831K inflation adjusted)
https://www.portfoliovisualizer.com/bac ... ion1_1=100
Do you guys NOT get that the reason folks say “time in market and not market timing” is because of the power of compounding?
That a “lost decade” is a decade of lost compounded growth you’ll never get back.
You’ll have lost $2.5M nominal gains from your current $300K holdings if your ideal of 20 lost years happens vs a fairly normal market without mega bubbles. And note that 1972 includes a pretty nasty bear market with a 46% drop coupled with inflation.
Yeah, you better have one hell of a savings rate starting $2.5M in the hole if the S&P 500 is only 4400 in 2042.
You better hope you don’t get what you wished for. Us older folks will likely be okay (a few less european river cruises) but you guys would be screwed.
It is economics 101 that it's best to buy stocks as cheaply as possible during the accumulation phase, and sell them as expensive as possible during the retirement.
The boring stock market periods you mentioned can't repeat at CAPE 35+. It really inhibits the exponential growth.
What you are asking for are two successive lost decades and which is 20 years of lost compounded growth which would be covered in finance 101. Perhaps you should have taken that class as well…
And going from 2700 to 4400 isn’t “exponential growth”. You know what can give you exponential growth? Compounded returns.