General Discussion
In reply to the discussion: So what happened with the DOW today −457.21 [View all]progree
(10,864 posts)Last edited Wed May 13, 2020, 03:28 AM - Edit history (1)
For example, a buy and hold equity investor with $143.81 at the end of 1928 had $166.15 at the end of 1944 (16 years later), and $1038.47 at the end of 1955.
The "safe" 3 month T-bill and the Treasury bond investor had $134.45 and $215.65 respectively at the end of 1955.
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
His listing of all current data sets he has: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datacurrent.html
Excel spreadsheet: http://www.stern.nyu.edu/~adamodar/pc/datasets/histretSP.xls
One can always focus on the very worst case. What I do is go by the monte carlo multi-thousands of simulations where, for example, in retirement one withdraws 4% of their balance to meet their spending needs in the first year of retirement, and that withdrawal dollar amount increases at the rate of inflation each year after. The investors who started out and maintained mostly equities, like 80-20 equities-fixed income have far less chance of running out of money in retirement than do mostly fixed income investors, and all-cash investors (T-bills) are hopeless.
https://www.democraticunderground.com/11211712#post4
If one doesn't need any of their retirement savings in retirement, yeah, it doesn't matter what the heck one invests their money in. But for most who aren't so lucky, then the risk of keeping up with inflation and not running out during retirement is the risk that matters.