The sequence of returns will not impact the final value when there are no contributions or withdrawals from the portfolio. The table shown at 2:19 in this video considers withdrawals from the portfolio, represented as 'Expenses'. The withdrawal amount considered for each year is 5% of the initial investment of Rs 100, which is Rs 5 each year. Since there is a withdrawal from the corpus each year, the sequence of returns impacts the final value of the portfolio.
This is valid when you consider withdrawal at fixed cost only, not valid when considering 5%. Because, when you consider 5% expense on capital, you can subtract this 5% from nominal return, to get net or effective return every year, so no difference between withdrawal / non withdrawal.
I think what he's saying is volatility reduces the total returns as it gets beaten by time value. Imagine if we If we invest Rs 100 in two portfolios for two years. Portfolio 1, Year 1 gets 10% return on 100 which is 110, year 2 gets 90% which gives total return of 209. The average yearly return is 50%. Portfolio 2, Year 1 gets 50% return on 100 which gives us 150, year 2 also gives us 50%, which gives total 225! Keeping the average return at 50% for both years.
the reason for different number is bcoz of expenditure column .....not bcoz of return......you are giving double impact......if everything remain same ......without expenditure column only on purely return ...it will not have any impact on the ending number....its simple math.......thats why CAGR return is mentioned.....
Consider diversifying your portfolio with a mix of stocks and stable assets. Seeking professional advice now could provide valuable insights and strategies to navigate market uncertainties and protect your investments.
@@RoseBalerus Agreed, my portfolio is well matched for every market season yielding 60% from early last year till date. I and my advisor are working on a 7 figure ball park
Your financial advisor must be really good, I hope it's okay to inquire if you're still working with the same Advisor and how can I get in touch with them?
@@SaptarshiRoySRoyPC if starting amount is same ending amount will be same That’s how CaGR is calculated This will only make sense if you have compulsion of withdrawal
It's one of the dumbest video's seen. You have just taken the average returns which is nonsensical, as we take the CAGR(geometric mean of the returns over the years). If this video was made by a noobie, I may have neglected this mistake, but surely he's a CFA, and talking on such topics by a qualified professional really makes me doubt on his skills.
Very poor education! I hope people don’t learn from such junk! Sequence of returns don’t matter (see Rajeev Thakkar’s video on this from PPFAS) A = p*(1+r1)*(1+r2)*….(1*rn) and multiplication is commutative last time I checked!
The sequence of returns will not impact the final value when there are no contributions or withdrawals from the portfolio.
The table shown at 2:19 in this video considers withdrawals from the portfolio, represented as 'Expenses'. The withdrawal amount considered for each year is 5% of the initial investment of Rs 100, which is Rs 5 each year. Since there is a withdrawal from the corpus each year, the sequence of returns impacts the final value of the portfolio.
This is valid when you consider withdrawal at fixed cost only, not valid when considering 5%.
Because, when you consider 5% expense on capital, you can subtract this 5% from nominal return, to get net or effective return every year, so no difference between withdrawal / non withdrawal.
Not able to understand who is more aware about finance, those making videos or those watching videos. Comment section tells something else
No one does average of yearly returns.. it’s basic math.. compounding has its own impact
Can you explain more ?
Yup
I think what he's saying is volatility reduces the total returns as it gets beaten by time value.
Imagine if we If we invest Rs 100 in two portfolios for two years.
Portfolio 1,
Year 1 gets 10% return on 100 which is 110, year 2 gets 90% which gives total return of 209. The average yearly return is 50%.
Portfolio 2,
Year 1 gets 50% return on 100 which gives us 150, year 2 also gives us 50%, which gives total 225! Keeping the average return at 50% for both years.
what about xirr? thats everyone look at rather yearly return.
That's the right way. This is a dumb video.
the reason for different number is bcoz of expenditure column .....not bcoz of return......you are giving double impact......if everything remain same ......without expenditure column only on purely return ...it will not have any impact on the ending number....its simple math.......thats why CAGR return is mentioned.....
But the expenditure column is the same in his assumption... -5, check the table again...
When will you upload more videos on charlie munger
Thats why sip mode is considered best.
excellent vdo
I bought Dixon @7154 (103 days ago) now it's LTP 11242 should i buy more are not?
look at PE. If it is low than previous buy you can make your decision
With around $250k to invest, I was able to jump on GameStop as early as three weeks ago…. Damn this feels so good
Consider diversifying your portfolio with a mix of stocks and stable assets. Seeking professional advice now could provide valuable insights and strategies to navigate market uncertainties and protect your investments.
@@RoseBalerus Agreed, my portfolio is well matched for every market season yielding 60% from early last year till date. I and my advisor are working on a 7 figure ball park
Your financial advisor must be really good, I hope it's okay to inquire if you're still working with the same Advisor and how can I get in touch with them?
@@cherylhills3227 That would be ERIC PAUL ELMER
He is a CFA whose approach combines technical and fundamentally essential analysis, and his platform has been the key to my financial success.
I understand Hindi
RIP to those calculate yearly returns 😂
I’m doing a sip in low vol 30 and momentum 30 equally since 6-8 months. Let’s see the outcome after 5 years. I plan to rebalance yearly.
if you make expenditure 0% means no withdrawals sequence will not matter or impact final outcome
Mutual funds have a expense ratio
The key to success is get average returns for above average of time.
It was so confusing to see this video, average returns will have the same final value unless you make the withdrawal.
Where is astha gone 🙃
same irritating "ah", "um" and "you know"
No one is here going to see returns annually, everyone sees compounded interest, I think you have wrong knowledge😂
I have wasted 10 minutes 😢.
no logic.....if the return % are same for both portfolio irrespective of the year and sequence it will have same value........
Try doing a time deposit with different principal amounts but with the same rate of interest. You will discover that the maturity amount is different.
@@SaptarshiRoySRoyPC if starting amount is same ending amount will be same
That’s how CaGR is calculated
This will only make sense if you have compulsion of withdrawal
I understand Hindi.not English
Now got it..
Never lose money.
Never forget rule no 1.
Paisa kam bare chalega, khone ka nehi..
Why don't you do the math, before making video?
Sequence of Return-Risk is a mere calculation mistake!
Kya tuma hindi nahi aati kya.😂😂😂😂. English ati ha to US jao.
What a dumb logic....!
It's one of the dumbest video's seen. You have just taken the average returns which is nonsensical, as we take the CAGR(geometric mean of the returns over the years). If this video was made by a noobie, I may have neglected this mistake, but surely he's a CFA, and talking on such topics by a qualified professional really makes me doubt on his skills.
Very poor education! I hope people don’t learn from such junk! Sequence of returns don’t matter (see Rajeev Thakkar’s video on this from PPFAS) A = p*(1+r1)*(1+r2)*….(1*rn) and multiplication is commutative last time I checked!
I understand Hindi
I understand Hindi.not English