The WORST (Yet Most Common) Investment Plan
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- čas přidán 19. 01. 2024
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Links:
- Visualizing 30 Years of Investor Sentiment: advisor.visualcapitalist.com/...
- S&P 500 Returns: www.officialdata.org/us/stock...
- Recency Bias: www.investopedia.com/recency-...
- Warren Buffet’s Nugget: www.investopedia.com/articles...
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DISCLAIMER: All videos on this channel (including this one) are for educational or entertainment purposes only. They are not (and are not intended to be) financial, investment or legal advice. It is our firm position that everyone has a unique situation and should seek professional advice on how best to navigate it. Rhys Martell is a Chartered Investment Manager (CIM), a Fellow of the Canadian Securities Industry (FCSI), a Qualified Associate Financial Planner (QAFP) and more. However, he is not registered to provide investment advice and, therefore, does not provide specific investment recommendations. Those looking for specific investment advice should seek out a registered professional.
S&P 500 in the period 2000-2010 delivered basically no return. In the same period XBB (Canadian bond index) beat S&P 500 delivering annualized return 6%. That tells us that a properly diversified portfolio especially in retirement is crucial.
Yes! Diversification in a retirement portfolio is super important.
no you just picked up tonnes of units at bargain prices then it exploded, and you won!
The S&P had fully recovered since the crash of 2020 while XBB is still at a substantial loss. Bonds aren’t as safe as one might think unless you plan to hold it for a decade or longer.
@@mrslcom Yes, you’re right, S&P500 fully recovered and since 2010 has had an incredibly good returns. As far as the bonds are concerned what’s the other alternative in retirement when you don’t want excessive volatility of your portfolio to affect the income???
@@Andrew21882 Unless you’re really young, I wouldn’t put all your fixed income portion of your portfolio into just XBB. I would hold a mixture of XBB, XSB, and GICs if you are close to retirement.
Another excellent video! Keep it up, please!
Great video.
My fav singer Ceilon... how nice
It’s a random comment..there are blues in there that were pointing down and up. Same with orange.
I've had enough of the "buying opportunity" over the past 2 years, we can start on the upwards orange line again now...
I started as a self directed investor in 1994 (windows 3.1) and had a front row seat for the Russian debt default in 98 - scary. Clinton, Rubin and Summers repealed the 1933 Glass Stegal Act and and off the markets went leveraged to the hilt all the way giving us these reoccurring boom-bust experiences. When the Nazdaq went to the moon in 2000 only to blow up you couldn't give an ounce of gold away. Gold then went on to most definitely out perform the S&P 500 for a clean eleven years. This market has been this overpriced only eight times since 1875 and now the trend in bonds (interest rates) looks to be changing. Good luck everyone.
Dang you let the secret out. 😢
Is the growth legit or mainly the result of money printing and inflation?
XSP, QQQ and VFV didn't exist back in 1993. But I started buying them when I learned about them. Commissions back then were $25 per trade. So buying more when stocks were going down was not very viable because with limited amounts of free cash in an RRSP an investor has to be very picky - he can't easily buy the biggest five holdings in the S&P or the DOW when they drop in a bear market.
Now they are $10 if you still don't have a no-commission trading account. During the March 2020 Covid crash, I kept buying index ETFs every time they dropped another 5%.
This chart is as revealing as one can be. The only people who would have a ''different'' opinion are those who actually retired in 2000 and counted on most of their RRSP to support their ''go-go phase'' period (while still keeping their ongoing balance in the markets). This particular group of retirees missed the gravy train in the end.
That’s life, isn’t it?
I don’t agree. Folks that retired should have had cash reserves ready for a year or two of expenses so if they stood tight (or even better maintained their asset mix which would have involved buying equities given the drop in value), they would have done very well and sailed through without an issue. Plus they also benefited unprecedented rise in home values if they owned. The secret is to have an asset mix and be disciplined on it plus having liquid cash for a year or two of living expenses. Many use a laddered GIC to ensure both asset mix as well as guaranteed living expenses. But agree that if they were scared out of the market and went 100% to cash, they were hurt badly.
Money that you will need in the next two years should be in GICs or money market funds anyway.
@@mrslcom It was a lot longer period than a year or two, more like a 10+ year period of eventually returning to a market flat to year 2000 value.
@@Spp235. I disagree as this was more like a 10+ year flat return, not only a year or two. The home values should not be included in this discussion as it was apples-to-apples in any investment scenario. Also, my assumption clearly stated keeping the meltdown balance funds in diversified investments in a market that still averaged a flat 10 year return. Therefore, the 2000 retiree balance that is melting annually will never recoup enough from a reduced capital to climb back to a flat return. If you’re younger then yes there was enough time to divert and eventually catch up but the 2000 retiree scenario is very different.
All of this market upside was created by money printing. They will need an excuse to print more to keep these levels elevated
Keep in mind also that past performance is not indicative of future returns.
Nobody is doing anything about all the money hoarding the superrich is doing syphoning it out of the economy to offshore secretive accounts.