Buy and Fold

By -
The NASDAQ index now stands at 1581. Given that from here to eternity the NASDAQ returns 7% per year, when will an investor who got in at the top (5048) break even?

My calculations show that will happen in, oh, about 2035 or so. So if your were 30 when you got in, the much vaunted "buy and hold" strategy will give you exactly the dollar-amount of funds you put in at just the time you're set to retire -- although, of course, the 2035 dollar will be worth a lot less than the 2000 dollars you invested.

Comments

  1. Anonymous3:23 PM

    If you assume that the gains work like compound interest, by the "rule of 72" it happens a bit sooner. But I wouldn't hold my breath.

    ReplyDelete
  2. gcallah6:18 PM

    I used a compound interest calculator and set the compounding to daily,not some vague rule that gives a rough estimate!

    ReplyDelete
  3. Bob Murphy9:56 PM

    I hardly think anonymous deserved an exclamation point, Gene.

    ReplyDelete
  4. Bob Murphy9:57 PM

    (You might as well have smashed his teeth in with your coffee mug.)

    ReplyDelete
  5. gcallah8:07 AM

    My fantasy is to smash LaMonica's with his own coffee cup, not mine.

    ReplyDelete

Post a Comment

Popular posts from this blog

Libertarians, My Libertarians!

By -
Cruel to be kind means that I love you . Because, while I think you are mistaken, your hearts are in the right place -- yes, even you, Silas --  unlike some people . This Breitbart fellow (discussed in the link above), by all appearances, deliberately doctored a video of Shirley Sherrod to make her remarks appear virulently racist, when they had, in fact, the opposite import. I heard that at a recent Austrian conference, some folks were talking about "Callahan's conservative turn." While that description is not entirely inaccurate, I must say that a lot of these people who today call themselves conservative give me the heebie-jeebies.
Read more

"Pre-Galilean" Foolishness

By -
 I am currently reading The Master and His Emissary , which appears to be an excellent book. ("Appears" because I don't know the neuroscience literature well enough to say for sure, yet.) But then on page 186 I find: "Asking cognition, however, to give a perspective on the relationship between cognition and affect is like asking astronomer in the pre-Galilean geocentric world, whether, in his opinion, the sun moves round the earth of the earth around the sun. To ask a question alone would be enough to label one as mad." OK, this is garbage. First of all, it should be pre-Copernican, not pre-Galilean. But much worse is that people have seriously been considering heliocentrism for many centuries before Copernicus. Aristarchus had proposed a heliocentric model in the 4th-century BC. It had generally been considered wrong, but not "mad." (And wrong for scientific reasons: Why, for instance, did we not observe stellar parallax?) And when Copernicus propose
Read more