The Western Union trap
"When the telephone began to gain traction, the monopoly of the time, Western Union, decided to get even better at sending telegrams." Seth Godin

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I regularly get questions about the expectations of future returns. Sometimes the questions are about the coming months, sometimes about the coming years and less often about the coming decades.

While I feel I have a lot of knowledge about the past, I am clueless about the future. I believe (but can’t know) the future will look just like the past. The market will be better than we expect for long periods of time and worse than we want for shorter, but still uncomfortably long periods of time.

Juice up your S&P 500 fund for higher returns

Ben Carlson recently write an article entitled, When is the Mean Reversion Coming in the Stock Market? and earlier in the year Long-Term Recency Bias

Both of these articles demonstrate the difficulty of knowing what the future returns will be. I knew some of you would like to see the same kind of information on a couple of our portfolios. I think you will gain some interesting perspective from Daryl’s tables.

As an investor my approach is to hope for the best but prepare for the worst.

Latest Podcast- AAII Q& A and New Graphs

The following questions were generated during a presentation Paul made to the Orange County and New York City AAII Chapters.

1. How do we go about finding someone (money manager) who follows your portfolio recommendations? Plus what is a reasonable fee to pay for advisory services? In the answer I do mention David Sterman. l⁠ and two videos by Rob Berger: ⁠5 Hidden Costs of Fee-Only Advisors⁠ and⁠ 5 Key Questions to Ask Your Investment Advisor⁠

2. How can I decide whether to go from 50/50 stocks and bonds to 70/30? I suggest looking at table B1 and B9.

3. What bond durations do you recommend?

4. What are the ETFs that you recommend for each of the equity asset classes you list?

5. Can I share your presentation with my children? ⁠ Here is a presentation that might be good for a young person⁠.

6. How do I find a good money manager and what questions should I ask? Here is a link to our free book, “Get Smart or Get Screwed: How to Select the Best and Get the Most Out of Your Financial Advisor.”

7. How do I get access to all of your charts and tables? Here is the link to ⁠Boot Camp⁠ where you can have access to all the tables.

8. What is your view of small cap value returns over the coming decades? In my answer I mention Ben Carlson’s ⁠article on randomness of historical returns⁠- When is the Mean Reversion Coming in the Stock Market? and his article Long-Term Recency Bias.

And here is the new ⁠graph⁠ that Daryl Bahls proceeded to see the returns of a couple of portfolios over the same periods as Ben addressed.

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"I recently tried to figure out how much I would have now (at 44) if I had invested 20% of my salary every year in a diversified portfolio similar to what Paul recommends. I previously had invested only enough to get my employer match (and sometimes not even that). Take it from me: start early and invest as much as you can! I’ve had to make significant sacrifices to catch up and I’m still not there yet."

AAII Q& A and New Graphs

21 Investment Questions Every Do-It-Yourself Investor Must Answer

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In This EditionBen Carlson ArticlesLatest PodcastTestimonial

In This Edition
Ben Carlson Articles
Latest Podcast
Testimonial

Ben Carlson and Daryl Bahls do it again!