Look at S&P 500 for example>avg of 10% return rate>adjusted for inflation, it goes up at ~7% a year>as long as the index keeps going up foreverSo what happens when the index just plateaus? With only the dividends giving a profit, retiring would be impossible, and once people start panic selling, their assets would become worthless, no?
Indeces are the total sum of win loss gains and trades on the most well known companies without the fees associated with each trade. They are invested into so consistently with people's 401k and IRA investments. They are now ultra low cost investments. There is no investment vector with a greater long term return then index funds and i dont see that changing for another 50 years
>>62188508way more "exit liquitidity" is being extracted from retail 401ks through target fund bond holdings than the sp holdings. imagine buying total market bond and total international market bond....JUST
>>62188472Especially in the US, the indexes are tethered to the economy. As long as there's GDP growth, there's every reason for the market to go up.
also our population increases because we arent full yet like europe. they are hard growth capped on that shit
>>62188508>>62188530>>62188550Once the population starts declining and productivity stagnates, won't the economy start declining, then?Someone who's invested on indexes for their 401k wouldn't be able to live off that money by that point, I feel.
>>62188575The US is the last economy on the planet to see real economic decline. It's the world's most robust economy.
>>62188588But why would the US or any other country be able to sustain indefinite growth of economic value?
>>62188619This is something Adam Smith solved over 200 years ago. It's because technological progress is a given, and luxuries are constantly becoming necessities. Indefinite growth is possible as long as material progress is possible. The only limit are our natural resources, of which we have centuries' left. Beyond that, idk asteroid mining.
>>62188619We arent even close to our carrying capacity look at the Midwest and rural bumfuck towns all over the US, TONS OF LAND to use.
>>62188635If Adam Smith gets proven wrong and technology does reach a wall, we're kinda screwed, though. If we don't enter the space age, there will be no new lands to explore nor improvements in efficiency increasing profit.>>62188644If growth is exponential, that land would be taken over in no time, assuming people are willing to completely deforest the globe.
>>62188530That’s not true, moron. The economy can do well and the market bad. That’s why recessions don’t always cause stock declines.There’s a difference in capital vs labor regarding share of income. Basically if you don’t compensate people in wages and instead squeeze profit margins higher and higher, stocks do well; but the economy won’t necessarily follow. That’s why people talk about recession now while stocks ATH. It’s not a sustainable trend for obvious reasons. People will eventually vote in a populist government that will reduce capital wealth across the board and while the economy could grow, you could see a decade of stagnant equity returns like we’ve seen numerous times.
>>62188619nobody says it's inifite, but it took hundreds of years for europe to fill up. it's probably not happening in our life times. if we crash before then it will be other reasons...like we are too kind of the rest of the world. we probably need to iron up our fist a bit.
>Fucks your plans up big time by putting a fat dent in your growth for over a decadeIf this happens again, what do?
>>62188706>That’s why recessions don’t always cause stock declines.They do though.
>>62188472Yes
>>62188755this is my exact concern, infinitely worse than a market crashit's why i've started diversifying into FMTMwould have done SPMO but SPMO gets fucked during dips lasting longer than 6 months since it rotates into new stocks only for the stocks it went out of to get a boost and then it's holding shit stocks only for SPMO to buy into the same stocks again at a higher price later on and miss the fucking gainsFMTM is just a once a month rebalancedon't fully trust it but I'm inching more and more money into it
>>62188802Jesus Christ.
>>62188817Well, this is why you diversify. Here's an example of a typically diversified portfolio (mine). Also, from 2001 to 2013 it still went up 40%. With dividends reinvested, that's 80% growth. Still not bad at all.
>>62188755Wait it out. Take a look at 1965-1982 for an even worse example. It happens. But here's the thing - despite the awfulness of 1929-1941, 1965-1982, and 2000-2012, the US market has still returned an inflation adjusted 7% over the entire time period, because while the bad periods were very not good, the good periods were better and lasted far longer.
>>62188755woah 10 years to buy the dip and now be up like 600%
>>62188858genuinely grateful you postedthank you anon!
>>62189038Should we buy high, or wait for them to sell low?
>>62188755It's okay because everyone else is getting fucked too.
>>62188858>80% growth in 12 yearsI almost threw up reading that
>>62188817>FMTMShit is so cash, but no options chain yet. Let me in already. I will not boomer hold sh*res.
