New all time high for XJO
- Thread starter craft
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Nice. I read somewhere that since 1900 years the All Ords has never finished any 10 year period lower. So, I guess we need 6,800 within 4 years.
skc
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True... or put another way. A big fat return of 0% for the last 5+ years for those who maintained their blanket market exposure. :bad:
Yer, but you have to be real selective about your start date to get 0%
The annual compound returns
| year | 10 | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 |
| rate | 9.8% | 8.9% | 6.6% | 5.1% | 1.6% | 6.3% | 8% | 9.1% | 19.2% | 26% |
If you are going to accumulate via market buy and hold - average in and the GFC is not that scary.
Scary is if you were already fully invested (lifetime view) and needing Nov 2007 like prices to fund your ability to retire etc - then you should have been well clear of the market risk - not because you knew what was going to happen but because you could not afford volatility risk.
skc
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I wasn't being selective. Just presenting the same information in a different way.
So when is the right time to reduce market exposure when you are coming up to retirement? Progressively reduce risk from 5 years out? I guess it also depends on your asset level etc. If you can't fund your retirement lifestyle in a 25% hit event, then you have no choice but to take more risk off the table earlier...
What's your own plan?
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I like that plan!
skc
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Have so much damn money that volatility is irrelevant. A 10 fold dividend cover of desired income should do the trick – wouldn’t like to cut it too fine.
Lol. You'd be the richest man in the cemetery. If one's already achieved 10x dividend cover, why would you want the volatility either way?
Side-story - a distant family member has accumulated enough for $1m for each year of his life past retirement... yet he's still playing the share market! So some people just can't stay away.
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I think I will always invest in the market. Its about the satisfaction for me (as well as the $$).
If I was mega rich I'd make a few portfolio's and try out different strategies to compare them against each other...maybe make a portfolio or 2 for charity and distribute the dividends every year to them....
Plenty of options after the first end goal is met
...now...back to achieving that first end goal
You don’t give something up that you love doing just because you don’t need to do it anymore.
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I think I will always invest in the market. Its about the satisfaction for me (as well as the $$).
If I was mega rich I'd make a few portfolio's and try out different strategies to compare them against each other...maybe make a portfolio or 2 for charity and distribute the dividends every year to them....
Plenty of options after the first end goal is met
...now...back to achieving that first end goal
Julia
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+1. The concept of 'enough' is something to perhaps consider.
Craft, I don't wish to be rude or intrusive, but if you have so much more than you need, and feel compelled to keep making more, do you give some of your wealth away? It always seems to me there are such huge areas of need in our community that the notion of someone amassing more and more wealth simply because they can, and just keeping it, is beyond my comprehension.
By all means ignore the question if you find it intrusive.
Your question is a bit intrusive or maybe it’s just more uncomfortable.
My flippant answer to SKC about plan for retirement wasn’t really about ensuring that I have enough money to retire – It is really more about retaining the ability to continue investing. If there aren’t oodles of reserves then I can’t afford to take the volatility risks as I get older. I seriously don’t want to give up investing. It’s not about money it’s about stimulation and enjoyment. So that’s one consideration in deciding how much to give away now. Another consideration is give some away now or compound it up and give away a lot latter - Maybe that's the best way I can use my particular skills for the benefit of society?
Actually I’ve got tonnes of unanswered and inadequately answered questions for myself around the whole subject. One thing I do know is that I’m very happy living a moderate consumption lifestyle and that probably won’t ever change – so sooner or later I have to come to grips with the topic – for now it’s later. To date I have settled on a private ancillary fund as the mechanism but haven’t yet established it. I like my anonymity and that goes especially around this topic so I hope you feel I haven’t ignored you but forgive me if I don’t discuss it further.
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Great point, how much more beneficial would it be to offer an annuity type income stream to your selected beneficiaries rather than a one off lump sum.
It keeps you satisfied and (providing your ability to succeed continues of course) will have a much longer lasting impact for the benefactors of the money.
Of course there are other considerations - but this is the approach I tend to favour.
Julia
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Thanks, craft. The response is appreciated. My intention wasn't to pry into your affairs, but rather because it's a topic that really interests me, i.e. why some people (not necessarily you) when they have more than enough to comfortably provide for their extended futures, still seem to be intent on making ever more money.
We see it all the time. Particularly people who have saved all their lives, and are still worried about actually spending money or doing something useful with it when they're in their 80's and older. Or those that keep on accumulating, yet never have that long promised travel, luxury car, or whatever.
You've quoted the interest and stimulation you derive and I expect others feel similarly.
Personally I was never so glad as when I could escape the volatility and take a more passive approach.
I wish you all the best in some day finding the answers to the unanswered questions.
Thanks, craft. The response is appreciated. My intention wasn't to pry into your affairs, but rather because it's a topic that really interests me, i.e. why some people (not necessarily you) when they have more than enough to comfortably provide for their extended futures, still seem to be intent on making ever more money.
We see it all the time. Particularly people who have saved all their lives, and are still worried about actually spending money or doing something useful with it when they're in their 80's and older. Or those that keep on accumulating, yet never have that long promised travel, luxury car, or whatever.
You've quoted the interest and stimulation you derive and I expect others feel similarly.
Personally I was never so glad as when I could escape the volatility and take a more passive approach.
I wish you all the best in some day finding the answers to the unanswered questions.
Hopelessly off topic here but anyway it is where the discussion evolved.
Funnily enough escaping the volatility is a shared goal – you by avoiding it me by making it irrelevant. That in turn allows us to live our lives in different ways and strive for different goals which make each of us happy in our own ways.
I think the answer to the rest of your pondering also lies in people doing what they want to do. Some people would prefer a practical car and leaving something behind over a luxury car. Some people would prefer to stay close to family and friends then trave etc etc etc.......
It’s also not too hard to imagine that some people growing up in poverty or with violence or lacking friends and family around them or for whatever reason really would have a sense of insecurity. It makes sense to me that what they would want more than material things is the security they get from money and enough security is never enough to fix the fears. Perhaps these are the people you are referring too – maybe you have to walk a mile in their boots to comprehend it fully.
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Well perhaps, but personally I welcome it, in fact prefer it. Overall the markets tend to generally move up when its volatile.
As evidenced of the all time high. Will it breakout? perhaps with the change of government it will, perhaps it will take a "dance" around the highs, or might continue on for a while longer.
Volatility is good for retirees who want it to spike up to cash in, and great for those that want to buy in when it dips and a day traders dream, and challenge for those technical traders...heavens knows I've lost track of all the methodologies Ive counted so far, but hey- seems like fun!! and enjoy reading about them in this forum.
Depends where your at in life, but hey whatever floats your boat, I think there is something in it for everyone, even those mining stocks that people cry about how they fall...and then spike up...take another look at the big picture its not THAT bad.
Julia
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A very relevant point and one to which I can relate, having actually had nothing after leaving a marriage in my mid 30's. The establishment of financial security at that stage was the emotional as well as practical target.
Part of the recovery process for me was a long term plan with a financial end point .
One's attitudes are also going to be determined by your intrinsic attitude to risk. Some of us are inherently risk averse, others thrive on it.
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I pretty much fit into this category. Having grown up in a household with little money around, I've always tended to favour security over affluence as an adult.
According to the insurer, my car is worth $3800. Yes, I could afford to pay cash for a brand new one tomorrow, but there's nothing wrong with the car I have now. It's running fine and I'll continue driving it until such time as it's either worn out or no longer suitable for my needs. A scratch on the bonnet and a few paint chips on the front just doesn't bother me in the slightest. Actually, I rather like the fact that I don't think twice before driving on a gravel or dirt road etc - the car is there to drive, if it gets dirty then so be it.
But on the other hand, I'm planning a trip to Europe (never been there before). That's obviously a non-essential expense but I have the $ and want to go so I will. But as usual I'll be sensible about it all. Staying in proper hotels certainly, but 3 star hotels and flying economy class is fine with me. Strange though it may seem, I don't actually want 5 stars and first class, even though I probably could afford it.
Hopefully someone else will find these links interesting. Probably most interesting for those who follow theories linked to Warren Buffett and those who look for trends and historical divergence or mean reversion in economic data and it's relationship to the value of the XJO / XAO.
Firstly credit due to the original blog-entry I read:
http://peterphan.blogspot.com.au/2013/09/market-thermometer-courtesy-of-warren.html
Link to Buffett's work in 1999 regarding indices valuation and its correlation to GNP / GDP.
http://castlereaghequity.com.au/wp-...-ratio-as-a-indicator-of-expected-returns.pdf
Link for similar methodology applied to our market in September 2013.
Firstly credit due to the original blog-entry I read:
http://peterphan.blogspot.com.au/2013/09/market-thermometer-courtesy-of-warren.html
Link to Buffett's work in 1999 regarding indices valuation and its correlation to GNP / GDP.
http://castlereaghequity.com.au/wp-...-ratio-as-a-indicator-of-expected-returns.pdf
Link for similar methodology applied to our market in September 2013.
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I found it interesting indeed thanks a lot
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