Longest Bull Market in History

joe sod

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Read an extraordinary piece a while back in which the author referred to an investor who on the day the euro came into existence embarked on a twenty year plan to buy the European banking index every day for twenty years

He lost almost 99% of the time
but who in reality would have done that nobody, it exaggerates the point that investing in european financials has been a terrible investment for a very long time, any irish investors in irish banks can attest to that. Still some have profited from it like wilbur ross.

Also the point by sarenco of the 300% gain in the S&P since 2009, very few investors would have been buying in march 2009 and probably none of those that did are still invested in the S&P today, they are probably investing in european financials now.
 

Sarenco

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because you chose 6 march 2009 as your starting point, the deepest trough of the worst financial crash since the 1930s as your starting point, thats why. On the surface a 300% increase in S&P500 since 2009 seems dramatic, an 88% increase since year 2000 is not.
You seem to have completely misunderstood my point.

I never suggested that a return of over 300% since the 2009 trough was particularly dramatic. The point is that the length of this bull market is unprecedented.

You're right, stock market returns since the turn of the century have been pretty underwhelming. But 18 years is not a particularly long time in stock market terms.
 

galway_blow_in

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but who in reality would have done that nobody, it exaggerates the point that investing in european financials has been a terrible investment for a very long time, any irish investors in irish banks can attest to that. Still some have profited from it like wilbur ross.

Also the point by sarenco of the 300% gain in the S&P since 2009, very few investors would have been buying in march 2009 and probably none of those that did are still invested in the S&P today, they are probably investing in european financials now.
It's an isolated quirky story but I thought it starkly illustrated just how dire that particular class of European equities have been for a generation
 

galway_blow_in

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You seem to have completely misunderstood my point.

I never suggested that a return of over 300% since the 2009 trough was particularly dramatic. The point is that the length of this bull market is unprecedented.

You're right, stock market returns since the turn of the century have been pretty underwhelming. But 18 years is not a particularly long time in stock market terms.
You don't think eighteen years is a long time to be invested in the market ?
 

joe sod

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You're right, stock market returns since the turn of the century have been pretty underwhelming. But 18 years is not a particularly long time in stock market terms.
thats fair enough, as a result would you be investing in global etfs (ex USA) (like Vanguard world ex USA etf) since the performance has been poor since the turn of the century, you could hardly say you are investing in overpriced assets. Even the much maligned irish property market has nearly doubled since 2000, so surely a low risk investor would be better off investing in global ex USA etfs like vanguard than irish property?
 

Sarenco

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thats fair enough, as a result would you be investing in global etfs (ex USA) (like Vanguard world ex USA etf) since the performance has been poor since the turn of the century, you could hardly say you are investing in overpriced assets.
I don't see how you could reach that conclusion.

You can't conclude anything about the value of an asset based on its performance over some random time period.
 

Sarenco

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Some foundations, sovereign funds, etc. have infinite time horizons - they think in decades, not years.
 

Sarenco

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I'm not sure I really understand your question but I guess it would be reasonable to consider something like 30-40 years to be "long term" in the context of an individual investor's investment horizon.

Over that sort of time horizon, the probability (but not certainty) of stocks outperforming fixed-interest investments becomes fairly overwhelming.
 

galway_blow_in

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I'm not sure I really understand your question but I guess it would be reasonable to consider something like 30-40 years to be "long term" in the context of an individual investor's investment horizon.

Over that sort of time horizon, the probability (but not certainty) of stocks outperforming fixed-interest investments becomes fairly overwhelming.
I suppose it would be best to tie that long term horizon to the concept of pension investment from an early age, when you take a multi decade - working life time frame approach , you can be pretty much guaranteed to have made a positive decision in putting money in the markets

Thinking you might hit the jackpot some way or other is in all liklihood sheer folly, wise investment choices are pretty boring
 

joe sod

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I'm up +25% these last few months thanks to the big market drops but I don't recommend an inexperienced investor try to "time" or short anything. I'm taking calculated risks which aren't appropriate for everyone.
you posted this on dec 8 last when the market was experiencing heavy sell offs and most investors were down substantially, obviously you had the right strategy to deal with that particular sell off and you profited from it. Just wondering how your investment strategy has coped with the incredible market recovery so far this year. Are you still bearish and if you are you must have given back all those gains? Obviously brexit is still a big unknown but brexit is proving itself not to be a global phenomenon but localised to irish and british investors, in any case because of the long drawn out process the market has largely digested brexit.
 

Gordon Gekko

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In my view, far too much effort is spent trying to time the market, trying to be too smart with the use of ETFs etc, and focussing too much on costs.

I’ve a very simple strategy:

- Retain 6 months’ worth of net salary in cash spread across two Credit Union accounts

- Max out my pension contributions and my wife’s AVCs; all of the contributions go into Zurich Life’s International Equity fund (0.50% for me, 0.75% for her). We’re going to stay invested in the same fund forever.

- Use any excess cash to pay down the mortgage

That’s it, nothing more complicated than that.
 
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joe sod

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European economy appears to be inches from recession, America more or less carrying global economy
Yea but Europe has been priced for recession for years, it was clearly wrong to buy into the extreme pessimism in December as even European stocks have had a big recovery from that. Look how pessimistic the scenario for buying Irish property was back in 2010 to 2014, there were a million reasons not to invest then .
 

lledlledlled

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In my view, far too much effort is spent trying to time the market, trying to be too smart with the use of ETFs etc, and focussing to much on costs.

I’ve a very simple strategy:

- Retain 6 months’ worth of net salary in cash spread across two Credit Union accounts

- Max out my pension contributions and my wife’s AVCs; all of the contributions go into Zurich Life’s International Equity fund (0.45% for me, 0.75% for her). We’re going to stay invested in the same fund forever.

- Use any excess cash to pay down the mortgage

That’s it, nothing more complicated than that.
For a little bit of additional diversity at no extra cost, would you not invest your wife's pension into a different fund than yours?
 

Gordon Gekko

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For a little bit of additional diversity at no extra cost, would you not invest your wife's pension into a different fund than yours?
Because I like the fund and I like the company. Their International Equity fund effectively provides the equity content for all of their multi-asset funds. My father got great results from them over the years as Eagle Star and I like how they do things.

My other choices were Irish Life or New Ireland funds, and my wife needed an AVC PRSA. I don’t want a Self-Administered scheme. Rather than overthink it, I’ve chosen to go this route. I don’t think we’ll regret it.
 

Sarenco

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So, the S&P500 reached a new all time high this week - it's up 17% so far this year.

Pretty incredible.

So what happens next? Who knows.

But it might be time to start thinking about taking some risk off the table - it's starting to look very bubbly to me.
 

joe sod

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So, the S&P500 reached a new all time high this week - it's up 17% so far this year.

Pretty incredible.

So what happens next? Who knows.

But it might be time to start thinking about taking some risk off the table - it's starting to look very bubbly to me.
But I thought you did not have any risk on the table in the first place, Sarenco. You were bearish last December even at the height of the Christmas sell off. It is true what you say about the incredibly long bull market, but remember we have had the unprecedented bull market in bonds since 1982. Also the long global bull market in property. If it all tanks there maybe no safe havens maybe gold and silver.
Robert shiller was talking about this topic, the very long bull market, but he added the caveat that it was coming off the deepest recession since the 1930s. He also said that this bull market including property (actually much more dangerous), is unique because of the lack of euphoria that normally associates with such markets, it's not 2005 or the 1920s, the man on the street is not excited like he was in other times. There is a wall of fear out there and incomes are not rising like they did before. He is much more concerned about the rise of populism across the world, the brexit vote and other stuff going on
 
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