Reddit reviews Stocks for the Long Run 5/E: The Definitive Guide to Financial Market Returns & Long-Term Investment Strategies

Thanks for sharing. I hope this gets more up votes!

However, one thing I will say is that it would be interesting if this data took into consideration how many years into the bull market the market was. Cuz think about it. it makes sense that ~66% of the time you are better off investing all your money because the market's general trend is upwards. However, the longer into a bull market one gets (tautologically) the closer you are to a bear market. So, to me, it would be interesting to see a chart showing how the percentage changes every additional year into a bull market... unless I am think about this wrong.

In Jeremy Siegel's most recent addition of Stocks for the Long Run he explains that there has never been a time when an investor in the US market didn't make money on an investment left for over a decade.

>RF tem, por definição, um retorno fixo acima da inflação

Não necessariamente. RF tem apenas retorno CONTRATADO, que não é necessariamente atrelado a um índice de inflação ou acima dele. Pode perder da inflação (olha o resultado de overnight/CDI desde 1967, segundo gráfico).

Além disso mesmo RF atrelada à inflação pode perder não só da inflação mas até perder principal pela marcação a mercado. Ou pode perder com a manipulação dos índices, não esquece que o governo manda no IPCA (não é por acaso que costuma ser menor que IGP-M).

Quer um exemplo aqui e agora de RF perder da inflação? IGP-M de 10,80% nos últimos 12 meses, com CDI em 6,40%. Ta perdendo feio da inflação.

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>dizer que o risco é menor me é estranho

Não estou dizendo, é o que os números mostram.

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>Que cálculo de risco foi feito, exatamente?

Volatilidade de retornos quando pega janelas de longo prazo. Se você quer fazer ou postar outro cálculo com outra forma de medir risco, fique à vontade, eu também não gosto de desvio padrão de retornos como medida de risco, mas é o que tem estudos hoje.

Já está na própria mensagem inicial, só ler:

• Além de mais rentáveis, ações são menos arriscadas acima de 15 anos (leiam o tópico inteiro)
  
• Para os que gostam de "fronteira eficiente", vejam que para longo prazo, ações entregam o dobro de retorno com MENOS desvio padrão.
  
  >"Stocks"? Nenhum índice parece refletir esse gráfico. Quais ações? Normalizado sobre o quê?
  
  O gráfico que você citou é extremamente famoso, do Jeremy Siegel em Stocks for The Long Run. Vi agora que tem 5 estrelas na amazon, primeiro livro de investimentos que vi tão bem avaliado. E tem a fonte no rodapé, era só buscar.
  
  Não é só um índice pois não há nenhum índice que pegue todo o período (desde 1800) de forma consistente. S&P500 começou só em 1957. Dow Jones é pouco diversificado, poucas empresas e começou pouco antes de ~1900, já na metade do período. Foram usados diferentes dados de diferentes estudos, até chegar em um índice "total market" de 1926 até agora. Diretamente do livro:
  
  
• 1802 a 1871: A brief description of the early stock market is found in the appendix. The stock data during this period are taken from Schwert (1990), thoug h I have substituted my own dividend series. G. W illiam Schwert, "Indexes of United States Stock Prices from 1802 to 1987," Journal of Business, 63 (1990), pp. 399-426.
  
• 1971 a 1925: The stock series used in this period are taken from Cowles indexes as reprinted in Shiller (1989): Robert Shiller, Market Volatility, Cambridg e, Mass.: M.I.T. Press, 1989. The Cowles indexes are capitalizationweig hted indexes of all New York Stock Exchang e stocks and include dividends.
  
• 1926 ao presente: The data from the third period are taken from the Center for the Research in Stock Prices (CRSP) capitalization-weighted indexes of all New York stocks, and starting in 1962, American and NASDAQ stocks.
  
  Referente a juros: See Sieg el, "The Real Rate of Interest from 1800-1990: A study of the U.S. and UK," Journal of Monetary Economics, 29 (1992), pp. 227-52, for a detailed description of process by which a historical yield series was constructed.
  
  Meu Kindle ta longe e desligado, peguei esses dados de um pdf do livro no google e não da minha cópia, talvez nas edições mais atualizadas tenha alguma informação complementar.
  
  Não tem mais detalhes sobre cada fonte e calculinho de cada número pois não estou escrevendo um paper acadêmico, são só informações úteis para o pequeno investidor, compiladas. Que me lembre todos os gráficos tão bem indicados do que se trata (por mais pouco usual que seja para um BR ler sobre índice de ações da Índia) para servir de ponto de partida a outras buscas para quem quiser ir além.

Some people really struggle with seeing loses in their portfolio. You should consider that maybe stocks are not a suitable investment vehicle for you if you are afraid you won't have the discipline to hold when the markets are down.

One thing that helps, is to realize that bear markets are normal and expected. If you have a long term strategy then it is nothing to fear, in fact, bear markets represent good buying opportunities to the long term investor.

I highly recommend this book - Stocks for the Long Run by Jeremy Siegel (You can probably find the pdf by googling it).

https://www.amazon.com/Stocks-Long-Run-Definitive-Investment/dp/0071800514

The book does a through analysis of historical stock returns and convincingly argues that holding a diversified portfolio of stocks for a long period of time is a very efficient way to invest. Even if you only read the first chapter, it may increase your confidence and help you create your own strategy.

http://www.amazon.com/Stocks-Long-Run-Definitive-Investment/dp/0071800514

Agreed. The average annualized total return for the S&P 500 index (a broad based market index) over the past 90 years is 9.8 percent. In a ROTH, it compounds tax free which maximizes the return. As the investor gets closer to retirement, the asset allocation should get a little more conservative with a smaller percent in the stock market which will reduce the average annual return.

Stocks for the Long Run by Jeremy Siegel is an excellent guide to investing in the stock market with a "buy and hold" philosophy.

I'll just add that I am retired. I fully funded whatever IRA or 401Ks were ever available to me. With 40+ years to allow for growth and compounding, I think I got about an overall 8% return.

Good luck! But, I highly recommend this book. If you know 0 about investing in stocks and the market. https://www.amazon.com/Stocks-Long-Run-Definitive-Investment/dp/0071800514 - Thank me later! great book down to the roots

I highly recommend these books:

• The Intelligent Investor - I owe everything to this book.
  
• Stocks for the Long Run - Incredibly well researched book on global markets.
  
  Madali lang kumita sa stocks. Madali din malugi :). Ginawa ko yung /r/phinvest a few years ago, pero hindi ko na halos nabibisita. May mga pinost ako doon na intro stuff sa investing at stocks.

That's about the long term average of of the stock market; source and source.

Technically I was a bit high, I should have said something like 2% interest 5% principal growth.

That's very achievable in a low load index fund. Yes, you will have down years where you loose 30% of your value, however, over a 20 to 30 year horizon, given any historical time period, the average return is a bit over 7%.

However that market fluctuation is exactly why 1m is not enough to live comfortably on; especially if you are young enough to be working at imgur. You've likely got a house, kids, kids college etc a head of you.

If you were retired with a house paid off 1m isn't too bad assuming you are only going to live 20 years , have no major medical (nursing care) and are pulling principle.

I’d highly recommend reading this book - Stocks for the Long Run by Jeremy Siegel

https://www.amazon.co.uk/Stocks-Long-Run-Definitive-Investment/dp/0071800514

It’s US focussed but the same principles apply anywhere. You can get a free pdf online if you search.

Stocks in the long run

There is a lot of really interesting data in this book, and it covers everything

• Your Money or Your Life
  
  
• [Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor] (http://www.amazon.com/gp/product/0471392286/ref=oh_aui_detailpage_o05_s00?ie=UTF8&psc=1)
  
  
• Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence
  
  
• [A Random Walk Down Wall Street: Including a Life-Cycle Guide to Personal Investing] (http://www.amazon.com/gp/product/0393027937/ref=oh_aui_detailpage_o06_s00?ie=UTF8&psc=1)
  
  
• [Stocks for the Long Run] (http://www.amazon.com/gp/product/0071800514/ref=oh_aui_detailpage_o02_s00?ie=UTF8&psc=1)
  
  Edit: Formating

What's the effect of holding period on returns, I wonder?