Age 76 here. Watched all types of investments for the past 50 years and my answer was -40% to +40%. I cannot tolerate a -40% at this age, therefore my meager savings are now in cd,s at about 5.4%. Days of wagering wealth with no time to recover are over.
I did pretty well. Your preamble mentioning anchoring bias helped though. I had just watched a video about that phenomenon recently. I guessed -50% to +50%. Plus, before seeing the prompt, my answer was that we have no idea.
My guess was -30% to +40%, so I was sort of close. I recently read a quote in an article that resonates with me. "I can't imagine what the markets are going to do, so I don't".
I'm guessing the "normal" is somewhere around -10 to +30 by just eyeballing the chart you put up. It would be interesting to crunch that data. (My initial answer was -20% to +20%.)
I answered -20 to +20 because there is a difference between 'range of returns' and probability of return. Not too long ago I made up a spreadsheet that mirrored that shown in the video, but then I calculated rolling averages over about a century for 10 years, 20 years, and 30 years. I was most impressed to see that an S&P investment has to be held close to 20 years to have a 70%+ odds of not having an average negative return. This, by the way, is why we see so much generational bias. Ramsey is the poster child for this problem.
I like this video a lot! I retired in Nov of 2021 and watched in horror as the market tumbled. Sequence of returns playing out before my eyes. It took a year and a half to realize that is why the 4% rule is as low as it is, reinforced by your excellent video. I realize there are no guarantees but I figure if the 4% rule doesn't work I will be part of the vast majority of broke retirees
I had the ability to get between 19% to 39% during the 10-ish years I was actively trading which I realize is far better than most but I have a real job not tied to finances as well as a life to live so I moved mostly into index funds for the last 2 or 3 years as I am getting closer to retirement
The range of possibilities is indeed wide, but most are “next year returns” influenced or biased by the present day situation, I wonder? And next year is an “election year” - where incumbents endeavor to apply policies that “feed” the economy- are the returns better, on average in election years? Conversely, looks like more war breaking out, does that negatively impact the market?
My answer, I don't care what the stock market returns. Whatever index you use, it's a basket of stocks. I'm not buying the basket of stocks. If I get into thinking about what the stock market is going to do, I set myself up psychologically for A LOT of pain and worry. So, I look at the fundamentals of the company, focus on their financial health to weather any downturns, look at their future potential for growth and put it into my basket, and ride it until things fundamentally change. I only care about my returns. I then only look at the stock market indices to keep score. 😁😆
-2 % to 3% and have been expecting low returns over the last 4 or 5 years which didn't materialize , now it looks like it will be dropping given global events ....
This was one of the best explanations I've seen. Thank you. When I look at the growth of my investments both in the 403(b) and in my Charles Schwab, I've held closer to the 5 - 6% range over the past 25 years. So this video brought into perspective to stop panicking, and stay the course.
Age 76 here. Watched all types of investments for the past 50 years and my answer was -40% to +40%. I cannot tolerate a -40% at this age, therefore my meager savings are now in cd,s at about 5.4%. Days of wagering wealth with no time to recover are over.
I did pretty well. Your preamble mentioning anchoring bias helped though. I had just watched a video about that phenomenon recently. I guessed -50% to +50%. Plus, before seeing the prompt, my answer was that we have no idea.
Thanks for sharing your experience!
I put -10 to +20. However, I have been a bit more anxious lately even though it look like I have a positive bias.
Thanks for sharing !
My guess was -30% to +40%, so I was sort of close. I recently read a quote in an article that resonates with me. "I can't imagine what the markets are going to do, so I don't".
Good quote !
I'm guessing the "normal" is somewhere around -10 to +30 by just eyeballing the chart you put up. It would be interesting to crunch that data. (My initial answer was -20% to +20%.)
I answered -20 to +20 because there is a difference between 'range of returns' and probability of return. Not too long ago I made up a spreadsheet that mirrored that shown in the video, but then I calculated rolling averages over about a century for 10 years, 20 years, and 30 years. I was most impressed to see that an S&P investment has to be held close to 20 years to have a 70%+ odds of not having an average negative return. This, by the way, is why we see so much generational bias. Ramsey is the poster child for this problem.
-20 to +20 (should have known -40 to +40). :)
I like this video a lot! I retired in Nov of 2021 and watched in horror as the market tumbled. Sequence of returns playing out before my eyes. It took a year and a half to realize that is why the 4% rule is as low as it is, reinforced by your excellent video. I realize there are no guarantees but I figure if the 4% rule doesn't work I will be part of the vast majority of broke retirees
Glad you liked it, thx for your feedback !
Illuminating.
I had the ability to get between 19% to 39% during the 10-ish years I was actively trading which I realize is far better than most but I have a real job not tied to finances as well as a life to live so I moved mostly into index funds for the last 2 or 3 years as I am getting closer to retirement
The range of possibilities is indeed wide, but most are “next year returns” influenced or biased by the present day situation, I wonder? And next year is an “election year” - where incumbents endeavor to apply policies that “feed” the economy- are the returns better, on average in election years? Conversely, looks like more war breaking out, does that negatively impact the market?
Until I hit 60 my mantra was "ride it out". Then we went 60/40 and the mantra remains the same.
My answer, I don't care what the stock market returns. Whatever index you use, it's a basket of stocks. I'm not buying the basket of stocks. If I get into thinking about what the stock market is going to do, I set myself up psychologically for A LOT of pain and worry. So, I look at the fundamentals of the company, focus on their financial health to weather any downturns, look at their future potential for growth and put it into my basket, and ride it until things fundamentally change. I only care about my returns. I then only look at the stock market indices to keep score. 😁😆
-2 % to 3% and have been expecting low returns over the last 4 or 5 years which didn't materialize , now it looks like it will be dropping given global events ....
-7% to +15% I'm an optimistic accountant 😎
Ha ha !
I was thinking -10% to +10%
2 % to 8%
This was one of the best explanations I've seen. Thank you. When I look at the growth of my investments both in the 403(b) and in my Charles Schwab, I've held closer to the 5 - 6% range over the past 25 years. So this video brought into perspective to stop panicking, and stay the course.
Glad it was helpful!