Comments on: Another Interesting Look at S&P 500 Index Returns

By: BG

BG — Mon, 02 Nov 2009 16:52:11 +0000

#6 Bill) An answer to your question about “reasonable standards to measure how well/poor investments are performing” should be to look at your goals, and see if your investments are still on track to meet those goals.

If you are no longer on track to meet the goals, then some action on your part is probably necessary (invest more dollars, change the investment mix, etc). You’d want to look at your original assumptions about your investments and identify what was wrong with them so you don’t make the same mistakes twice.

If you are on track to meet your goals, then you can ignore the day-to-day (or month-to-month) volatility. If you have the time, try to seek out ways to achieve the same return at a lower level of risk: lowering investment costs is a good start.

At the end of the day, only you can decide whether your investments are living up to your expectations/goals. Here’s a tip: assume a conservative ROR, and be surprised on the upside in retirement (have extra money). You don’t want an overly optimistic assumption and be surprised on the downside in retirement (and have to go back into the workforce).

By: Bill

Bill — Sun, 01 Nov 2009 16:47:24 +0000

Have a question:

What reasonable standards should investors use to measure how well or poorly that they are doing?

I’m sure that an answer would include “it depends” but if so, depends on what?

We are about 10% under our 12.31.07 balances and we are pleased but how pleased should we be? There is always someone who well fare better or worse but I’m at a loss as to which reasonable “standards” that I should use to know how I’m doing?

Thanks,

By: rfeight

rfeight — Sat, 31 Oct 2009 15:44:35 +0000

Eerily similar to Fibonacci numbers huh?

By: Stacey

Stacey — Fri, 30 Oct 2009 00:02:23 +0000

Thank you, dear!

By: JLP

JLP — Thu, 29 Oct 2009 22:04:11 +0000

Yes, Stacey. I will update that chart at the end of the month.

By: Stacey

Stacey — Thu, 29 Oct 2009 21:50:07 +0000

Shouldn’t we be looking at the average PERCENTAGE gain among those positive months vs. the average % negative gain? For each positive month it could have ranged from .01% to 300%+; likewise w/the negative range -.01% to ???. Sorry if you’ve done this already in a previous post. I’m guilty of not always looking at EVERY chart

By: Traciatim

Traciatim — Thu, 29 Oct 2009 19:11:04 +0000

By that chart, I wonder if using t magic formula investing strategy with getting in in October and getting out the following August, then use the September to research a few companies for your next year. Seems like as good a selection method as any… I wonder if you could back test that very well.