> You show be someone who retires after 10 years and I will show you the > tooth fairy. Stocks are a long term investment. Show me the worst > historical return over 40 years, the current expected working livetime > of an American paying into SS, and I will show you a rate of return > MUCH better than you'd get with Social Security. > > -Cameron
I understand the point you are making. Historically, I've been told, nothing has returned more in a 10 year period then equities. I haven't had the time nor the inclination to produce the tables for it. But I'm inclined to believe it because it seems that way. At the same time I understand Gruss point, even if he didn't explicitly state it. The 10% period guide is actually very misleading. Let's look at this way, you have $1M to invest over 10 years. year 1: -35% running balance: 650,000 year 2: +01% running balance: 656,500 year 3: -01% running balance: 649,935 year 4 - 9: 0% running balance: 649,935 year 10: +45% running balance: 942,405.75 The market in that 10 year period has a return of 10% but you actually lost money because you have to weight it. And if this happens you are behind the 8-ball. You have to take on more risk at a time when you should reducing your exposure. You can run some Monte Carlo sims to see best and worst case scenarios with more realistic parameters. Obviously mine is a very exaggerated. In the long run, stocks are your best bet. But we have to really get a good grasp of the risk involved. And even if you are investing to the tilt, it can't hurt to save a little more. If guaranteed income is an essential, you can always put a portion of the money that was slated for SS tax into CDs and the other portion into other vehicles. I wasn't really too clear, but I'm for the private accounts if the government can spell out all the cost before hand. Cameron makes a very very good point. If this is done correctly, it would be a major anomaly. -- 2004 - The year $184M couldn't buy a pennant. Ron Artest: Extremely flawed, very accidental, semi-martyr ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Sams Teach Yourself Regular Expressions in 10 Minutes by Ben Forta http://www.houseoffusion.com/banners/view.cfm?bannerid=40 Message: http://www.houseoffusion.com/lists.cfm/link=i:5:143213 Archives: http://www.houseoffusion.com/cf_lists/threads.cfm/5 Subscription: http://www.houseoffusion.com/lists.cfm/link=s:5 Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5 Donations & Support: http://www.houseoffusion.com/tiny.cfm/54
