Warren Buffett - How to Invest in Index Funds
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- Опубликовано: 27 янв 2021
- Warren Buffett and Charlie Munger speaking at the 2002 Berkshire Hathaway annual meeting.
The books mentioned in the video;
Common Sense on Mutual Funds by Jack Bogle: amzn.to/3j6o1Ut
Bogle on Mutual Funds: New Perspectives for the Intelligent Investor: amzn.to/3cdS7DY
(The above are affiliate links.)
My strategy is; buy quality companies, expect to hold no matter what, pay up but don’t over pay, keep track, sell rarely, be ready to course correct
A lot of people think they should always be buying and selling something. That's a mistake. 99% of successful investing is waiting, learning, awareness/experience and getting extremely lucky with the market.
I totally agree, although coming into the market i missed the experience part, but my current trader helped me. She turned my 40k loss, made me 70k in a month, if not for her, i can't even begin to imagine....., she actually does most of my trading, to be honest.
@@mariahhayes5089Exactly, i will never go into this market without guidance, please who is this coach that helped you, can you possibly do a referral?
@@mayacho4910She is a licensed fiduciary in the U.S, i work with her to up my securities.
@@mayacho4910'PRISCILLA DIANE AIVAZIAN"
Ugh, if only I was intellectually curious enough in my early 20s to seek and heed this advice from Warren, Charlie, and John Bogle!
Im 19 and trying to myself i know if i wait I’ll regret it
I am 16 and I am very lucky to have discovered these guys from India.❤️
Ahaha well. I'm 17 let's goo
Im turning 15 in a few months and im staring to invest in index funds, i have started investing in 2 of them one global and one scandinavian with 30-40$ a month. Do you think this is a smart choice?
@@the0mannen379 that’s smart but you should start directly very small amount in stocks on your own only , you will learn a lot in next 5/10 years max but that will help you lifetime for wealth creation ways
Investing in the stock market has HISTORICALLY provided higher returns than other forms of investment. According to Morningstar, the average annual return for the S&P 500 index, which measures the performance of 500 large-cap stocks, was approximately 10% from 1926 to 2020.
Stocks are pretty unstable at the moment, but if you do the right math, you should be just fine. Bloomberg and other finance media have been recording cases of folks gaining over 250k just in a matter of weeks/couple months, so I think there are alot of wealth transfer in this downtime if you know where to look.
The best course of action if you lack market knowledge is to ask a consultant or investing coach for guidance or assistance. Speaking with a consultant helped me stay afloat in the market and grow my portfolio to about 65% since January, even though I know it sounds obvious or generic. I believe that is the most effective way to enter the business at the moment.
That's fascinating. How can I contact your Asset-coach as my portfolio is dwindling?
Credits to 'Natalie Lynn Fisk' she has a web presence, so you can simply
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
people sanctify those RUclipsrs with zero experience and appealing thumbnail, but the true GOLD is those videos.
keep up the amazing content!
Warren Buffett is the only person who could talk about index funds and make it interesting.
Jack Bogle as well, the Vanguard of Index investing
I do love that Warren recommended we read Jack Bogle.
and for the record, some s&p 500 funds have gone up by as much as 78% since this video got posted, thank you gents
We also live in that time Charlie where stocks are high priced
Nobody can become financially successful over night. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals.
Insightful video. I just want to know best how people split their pay, how much of it goes into savings, spendings or investments. I'm 27, and earn nothing less $150k per year, but nothing to show for it yet.
When people have money, they spend it. And some people spend more money when they have more of it. If you want to improve your financial management, you should consult with a financial advisor.
@@sherryie2 That's right, you can avoid the traps of lifestyle inflation by consulting an expert advisor to help you plan for your short- and long-term goals; it all comes down to proper guidance. Over the past two years and six months, I have seen my income build wealth and now have a fully paid off house and at least $650,000 in stocks. All this is the result of subsequent investments with my savings and the application of expert advice.
@@corrySledd Nice, who is the Financial Advisor aiding you if this is not much i'm asking? my retirement plans are going down the drain with my 401k particularly losing everything it gained ever since 2021.
@@AUstinnesc My advisor is the quite famous NICOLE DESIREE SIMON She has been making a fortune online worth millions of dollars in digital assets for a select few for years. Lately, these types of services have appeared that allow you to copy the results of the experts. She demonstrates how to copy it automatically using that system.
@@corrySledd Thanks for the info, i found her website and sent a message hopefully she replies soon.
Thank you for uploading this. These two gentlemen are so good to share their wisdom, learning and experience. How lucky for the average person to have this opportunity and good fortune to partake and benefit. Best common sense and hard headed advice and approach I have heard.
Thanks for this video and info on book.
The most insightful talk I've heard. You have to listen carefully and several times. Assuring your old days comes down to despite not being able to predict a winner in an soecific time, you invest bit by bit across several years. Incredibke talk! In a nutshell is how to make your investment anti fragile and not dependent upon what you don't know.
Following the same path here in India.
Yup nifty 50 sip works..
a 16 yo stock perv getting a hard on S&P 500 from India.
Thanks for the refreshing content!
Thanks for commenting
I will refer you to my trade analyst and accountant to make a good income, go more in digital assets.
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WhatsApp 👆👆👆
2:50 is awesome. If you think it is great then invest over a long period of time. Not a large chunk at once. I.e. if you think that index is great then keep investing in it for a long time.
That isnt really what he means. If you put a massive chunk, or all your net worth, in when the index is at top of price bubble you are not going to get good returns. If you average in over years you will get average sandp returns hopefully.
As munger said their may be a decade or two of no growth and a possible decline as well. It's a tough game to know what's going to happen. Only buy after a crash is my theory.
Great advice
Keep up the great content!
Thanks for commenting
I will refer you to my trade analyst and accountant to make a good income, go more in digital assets.
+1 5 1 2 2 7 3 7 0 7 3
Vanguard index funds made me rich! Retiring in two years at the age of 57.
How many different vanguard index funds did u invest in? There's so many
@@Anomicchaos Midcap is a great one
im 19 and just did my first monthly investment in a vanguard fund! two different ends of the spectrum!
@@loganbruce You will be rich!
@@loganbruce how did you get started
Buy VOO and hold. Nuff said
when Buffett asked for the peanut brittle....I wish Munger had asked him what it was worth to him
Wow I knew the answers to those questions in High School
I wish 16 year old me could absorb this information and act on it. 🤯
Hi how old are u, am 26
@@TheMegaTusharI’m 13
I'm not sure what year shareholder-meeting this is, of Berkshire Hathaway; but, post-2008/-2009, very low interest-rates - both in the United States, and in much of Western Europe - with corresponding very high equity price-earnings ratios, have (at least to the time of this writing, January 30th, 2021, ~5:25 P.M., E.T.) become the typical, rather than the hypothetical.
Its from 2002.
Buffet clearly says not to go broader beyond an S&P 500 fund..small caps etc
Can you over pay for an index fund?
Charlie is too damn funny
I think what Charlie says could well come true. Too many people piling into common stocks. The market is over valued then stagnates for a long time. It fid happen in Japan. The market stagnated and fell slowly over many years.
When asked why he didn't invest in Japanese stocks in the 90s Buffett said "because the low return on equity of Japanese businesses justifies their lower prices". So long as the major constituents of the S&P500 sustain good returns on equity, higher prices will be justified in a way that it wasn't in Japan. Name 5 Japanese businesses with durable competitive advantages. Can't do it? Now name 5 American businesses with durable competitive advantages. Easier right? S&P is a powerhouse that will continue producing much of what the world is willing to pay for, and thus will be a good investment relative to just about anything else. Notice Charlie didn't give an alternative. The only alternative is to bet on individual companies that will beat the average over time, and this is too difficult and risky for most people, so no wonder they are piling into the index. The time and energy you waste evaluating individual stocks could be invested in raising your salary and investing more money into the S&P. A low rate of return doesn't matter if you have alot of money, so raising your income is more important than pushing for higher returns. Thats why Buffett says take the job you love, because you will work harder and thus earn more. 2% of $10 million is better than 10% of $1 million.
@@SidCurtin-yi7fl True
Japan fell or stagnated for decades. Feels like we're on the same path.
If only we were taught about investing during Senior year if highschool.
No one would listen.. still
I wish I knew 🤦 could have made a lot and engaged in the stuff I always wanted
Still the same, the only one that would listen is the one that already have an interest.
Anyone know what books was being referred in 1:48
This meeting took place in 2002. Buffett states there are 2 books in the last 5 years. I searched for his Bibliography and found these which are in that specified time frame.
Slater, Robert. The Vanguard Experiment: John Bogle's Quest to Transform the Mutual Fund Industry. Chicago, IL: Irwin Professional Publishing, Inc., 1997.
Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (John Wiley & Sons, 1999), ISBN 0-471-39228-6
John Bogle on Investing: The First 50 Years (McGraw-Hill, 2000), ISBN 0-07-136438-2
Character Counts: The Creation and Building of The Vanguard Group (McGraw-Hill, 2002) ISBN 0-07-139115-0
Author: john bogle
He mentioned alll of his books
Plotting these techniques over the previous ten years is something I would like to see. Are they all about the same, or did they all perform well? I've been struggling to manage my allotment. Now that I'm fifty years old, I've begun to switch from riskier to safer investments. Bonds to individual stock ratio is lower.
Investors should be cautious when deciding which new investments to make and when limiting their exposure, especially during inflationary times. To manage this recession and perhaps obtain high yields, it is advisable to get advice from a professional or trusted advisor.
Yes, for the past eight months or more, I have been in daily communication with a financial analyst. These days, it's really simple to invest in trending stocks; the difficult part is deciding when to sell or hold onto them. My manager can assist me with entry and exit points in the sectors I work in in this situation. I can't say I regret it because, with my $160,000 starting capital, I'm 40% ahead in profits in just five months.
Vivian Barbara Mui . Thats the name
Thanks for the info.I already reached out to her.
Now that you can buy fractional shares you can duplicate an index fund on your own in a self-directed account without paying any fees.
You make a very interesting point. I had never thought about it.
you can but thats a lot of individual trades which is time consuming, and assuming its not passive you need to rebalance it every couple of weeks. So yes its posisble, but its alot of work to manage.
The other thing as well is that some brokerages will have a minimum purchase for each stock, if thats 50 dollars each, then well thats potenitially tens of thousands of dollars depending on how many companies you include. To replicate the SP500 that would be 25k at 50 minimum.
So based on that, I would perhaps isntead consider my entire portfolio as an index fund, and not specifically go out my way to make one.
ALL GME gamblers need to watch this. And Charlie points out the exact risk of owning an index fund.
Most are taking the piss for fun :)
They're not gamblers, they're rioters. Far more effective than whatever Occupy Wall Street accomplished.
Why the same people will continue to gamble their money, doesn’t matter what they hear or learn, people are stuck in there ways
@@jk47Ssb their*
No, in fact he overstates the risk of owning an index fund with periodic purchase of units. Both he and Buffett overlook the fact that the Nikkei 225 has returned about 1% CAGR when accounting for dividends being reinvested. 1% might seem small but those are comparable returns by Japan's standards to other instruments there like bonds and bank deposits
Coming out of the pandemic was a great opportunity to buy.
Is there a big difference between an S&P fund like SPY and a Nasdaq fund like qqq? Both have great returns but I’m not sure where to put my cash!
VOO is the place to put your money.
His recommendation to invest chunks over time is inconsistent with the research that finds that lump sum investing beats dollar cost averaging on average. The reason is that one loses gains while waiting.
I think he means if you were only going to ever invest once ie use your entire life savings on one purchase. He is fine with investing each year.
He just nailed the precursor 2 what could follow from Japan's problems into America. As a matter of fact the concerns of deflation is potentially the very beginning of a uncertain duration of stagnation economically where printing all the money creates very little growth if any because of such an economy. It's real in Japan w/25 years of unstable devalued currency searching for a new value because any form of paper or feit money is worthless on its own Merritt. The world becomes the judge of your currency do 2 exports/imports. I can see a market crash w/a horrible but short term (2- 2-1/2 years), of possible deflation. I just hope not.
Japan's long depression is the result of three factors. First, their stock market was hugely overvalued when it crashed back in the 90s. Secondly, Japan is falling off a demographic cliff in terms of birth rates and population replacement. It is one of the three oldest countries in the world in terms of average age. The other two being Italy and Germany. Those three countries have something in common which has contributed to their population problems. (Hint: Fighting bloody wars is really bad for a lot of reasons. But losing a bloody war is usually catastrophic from the perspective of population growth.) With Japan's aging population not having children, this is creating a lot of problems both in terms of worker replacement in the broader economy and also declining tax revenues needed to sustain their extensive social welfare system. The third component is the inherently conservative social attitudes of many Japanese. Their deeply intrenched hostility to immigration has hugely exasperated their population decline. Additionally, following the crash back in the early 90s many Japanese simply stopped buying stocks and put all or most of their money in government bonds. This has helped keep stock prices low as well as interest rates, while helping the government as it continues to borrow staggering amounts of money, at very cheap rates. But in summary, unless they can figure out how to reverse their population collapse, Japan is a bug waiting for its windshield. I don't currently see this as a problem here in the US, at least not yet. That said, keeping maybe a quarter of your stock holding in a cheap international index/ETF fund is a good and simple hedge. For those who are really concerned about a long term deflationary crisis, I'd suggest concentrating on dividend paying stocks (VIG, VYM, VYMI).
Dca till a bear market drop of 20% then do a lump sum
Buffett says don't put too much in at one time. Vanguard is saying do a lump sum all at once because the longer you're in the market the more returns you'll get. Who's right and who's wrong?
What books was he referring to?
Anything written by John Bogle
This meeting took place in 2002. Buffett states there are 2 books in the last 5 years. I searched for his Bibliography and found these which are in that specified time frame.
Slater, Robert. The Vanguard Experiment: John Bogle's Quest to Transform the Mutual Fund Industry. Chicago, IL: Irwin Professional Publishing, Inc., 1997.
Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (John Wiley & Sons, 1999), ISBN 0-471-39228-6
John Bogle on Investing: The First 50 Years (McGraw-Hill, 2000), ISBN 0-07-136438-2
Character Counts: The Creation and Building of The Vanguard Group (McGraw-Hill, 2002) ISBN 0-07-139115-0
@@master0fnone 🙏🏾
Which books is he taliking about in 2:00 ?
Author: john bogle
He mentioned alll of his books
great advice from a reall great man
Does anyone know what books he was talking about?
The books are linked in the video description.
we are in times when the interest rates are very very low
Ah the good ol days
I think about 40% in index funds is the way to go
"ALL IN"
All in? Do you mean lump sum invest at once?
Man I almost thought he wasn’t going to get the peanut brittle!!!!
They have ‘people’ at these talks who could’ve opened it faster. 😂
Charlie makes a great point and I have asked the same question. Is it possible for the S and P 500 to become over valued to the point that it breaks the indexing model? It seems Warren is saying even if that happens it would still be a good place for average investors to invest in. Any thoughts?
There are four factors that determine stock value: 1) present earnings, 2) growth in future earnings, 3) how long these earnings and growth will last, and 4) present risk free interest rates. If you knew these things you could perfectly value a stock, because these are the factors that go into a discounted cash flow calculation, which Buffett has said is the only rational way to determine intrinsic value. The PE ratio of any stock (or index fund) represents the collective judgment of all investors as to these factors. Now a quiz: if you could buy a stock with PE = 20 that would never grow its earnings in the future, vs another PE = 20 stock that would grow its earnings at 5% for the next 10 years, which would be more valuable? The answer is obviously the one that will grow its earnings (assuming both won't go bankrupt, equally competitive etc.). Now another quiz: if the historical average PE ratio of the S&P500 is 15, and the present PE ratio is 40, is the index fund overvalued? Remember the four factors that determine value. 1) Present earnings relative to price would give an immediate return of 2.5% next year (100/40), which is lower than the historical average of 6.6% (100/15). On this basis alone it appears that the index is more expensive than it used to be. However, there are three more factors (that most don't consider because they are scared away at this point). 2) growth in future earnings. Will earnings of the S&P500 be higher or lower in the future than they used to be? This is unknowable, however consider that the S&P500 is weighted towards big internet/ tech companies that can grow earnings without costs as high as capital-heavy businesses of the past. Internet companies are much cheaper to run than brick and mortar companies, and therefore its easier to grow earnings in these (e.g. google, facebook, amazon etc.) If future earnings growth in these sustainably increases above historical averages, this will justify a higher PE than the historical average (representing equal value to a lower PE with less earnings growth). 3) How long will this last? As long as America exists, the S&P500 will keep growing at some rate. The long term continued growth/existence of the S&P500 is more predictable and safer to count on than just about any individual stock, because any stock could go to zero if some dumb manager takes over the day after you buy it: overleverages, overcompensates himself and milks the place for all its equity (which usually happens with every company eventually). At least the S&P500 allows you to sleep at night knowing your investment won't go to zero (if it does you'd be worried about other things like nuclear fallout). 4) present interest rates. When interest rates are lower, stocks are more valuable because the opportunity cost for not investing in bonds is lower. Interest rates are lower than historical averages (0 to 1% now vs 3-4% historically), justifying higher PE than historically. In sum, higher PE ratio means that the investing public thinks S&P earnings will grow faster than average, and interest rates will remain lower than average. If they right, higher than average PE will be justified. If they wrong, there will be a period of low returns til then (still likely better than cash/ bonds). So forget about all those factors Buffett says, and stick a portion of your income into S&P500 every week for 30 years and take your fair slice of any returns that do eventuate.
@@SidCurtin-yi7fl thank you for this 👍
@@SidCurtin-yi7fl Charlie has also stated that he's never actually seen warren do a discounted cash flow, and that they don't use beta. Sl it isn't a standard discounted cash flow model. He used market return (-) the expected maximum risk free rate during his holding period to determine the cost of equity. He has stated that you may have to use a higher margin of safety but he doesn't use beta to determine cost of equity because that would imply that risk and return are correlated which they have stated they don't believe in "there is no formula for risk". Also if you disagree not Klarman's point "risk and retunr musk be assessed seperately. Risk doesn't create return only price can do that." He "discounts" the cash flows but not in the same way a traditional dcf is performed. Also note that Graham used asset value. Imvestors like Li Lu use EPV and asset value whoch actually creates more insight than a traditional dcf. Read Bruce Greenwalds book "value investing From Graham to Buffet and Beyond", he was Li Lu's - who Charlie invests with in Asia - professor at Columbia and goes over the problems in traditional DCF. Gl to you
@@acetheboss13 They use long term government bond interest rates to discount back conservatively projected future cash flows (which average about 2% over time) which converts the stock into a bond paying 2%. This is easy to do in your head if you take the average 5 year net income and divide by 0.02 (ie multiply by 50) to get the present value of that cash flow annually in perpetuity. After the get the intrinsic value they then obviously look for a price way below that to increase the return and compensate for risk of the earnings not being certain. They don't consider asset value anymore because there aren't any that are large enough to make money in. They profit off correctly estimated future earnings of massive companies, e.g. apple and PetroChina now rather than Graham's method which only applies to small companies most of the time.
@@SidCurtin-yi7fl Traditionally Warren used asset value which is what I'm stating but I'm also stating many value investor use EPV and asset value to determine half life of investment. There are different situations in which they don't invest based off of the correlation between asset value and epv which takes into consideration the durability of earnings in correlation with the effect that competitors will have on returns on capital. Also there's no cost of debt consideration in your calculation which is supposed to take into consideration current tax rate and cost of debt financing? Let's continue to have a constructive conversation- I like where this is gping. What's your 2 cents on that information?
What is the person he recommends the books from?
John Bogle
From Vanguard
This meeting took place in 2002. Buffett states there are 2 books in the last 5 years. I searched for his Bibliography and found these which are in that specified time frame.
Slater, Robert. The Vanguard Experiment: John Bogle's Quest to Transform the Mutual Fund Industry. Chicago, IL: Irwin Professional Publishing, Inc., 1997.
Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor (John Wiley & Sons, 1999), ISBN 0-471-39228-6
John Bogle on Investing: The First 50 Years (McGraw-Hill, 2000), ISBN 0-07-136438-2
Character Counts: The Creation and Building of The Vanguard Group (McGraw-Hill, 2002) ISBN 0-07-139115-0
@@master0fnone great work man 😯 thanks to all answers!
@@MrAngryCucaracha The book you are looking for is "The Little Book of Common Sense Investing" by Jack C. Bogle
In this book you will learn everything you need to know about index Investing. I have read the book multiple times and always go back to it to remind myself why we index.
Jack Bogle teaches us to invest 80% in Vanguard Total Stock Market ETF (VTI) and 20% in Vanguard Total Bond Market ETF (BND). He says "Don't look for the needle in the haystack (S&P500 VOO). Just buy the haystack (VTI)!"
Hopefully things continue as the historical trend. But as we get an aging population, a lower birth rate and possibly less consumption around the world, I worry that historical trends will no longer be valid.
The most important thing that should be on everyone mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies.
That's so true. but if i may ask, do you trade all by yourself?
I have been investing in stocks for over 10 years now and I have made a lot of money. My portfolio has grown exponentially and I can't thank stocks & TERESA JENSEN WHITE enough for such an amazing way to make money!
How can this person, TERESA JENSEN WHITE be reached please...
Wow! I just looked up this person out of curiosity and I'm super impressed with her qualifications. Thanks for sharing.
I don't think a P/E ratio would honestly matter if you invest all at once or even a large chunk and forget about it for 5-10 years. We know that the market will go up in the long term, because your country's economy will continue to grow, so your compounded rate of return will reward you handsomely. Individual years may be bad, but you will make money over time and even more than that, if you reinvest dividends
If you put all your money in and next day it loses 50% value... You aint going to do well over 5 years bro.. or even 10. Maybe 20
Historically speaking if you had dumped all your money into s&p 500 IDX on Septermber of 2001, you would have not gained anything until 2013. So Warren is saying that investing over a 20 year period of time gives you a good chance that you won't be buying all of it at the top at the very least. Which should maximize your odds of return.
Did he pass the peanut brittle?
We want to know why?
Not knowing what thieves on boards are doing is a gamble unless you know.
Very prophetic! The decade 2000-2010 saw in fact a negative return from the s&p500. Then the 2010-2020 had the greatest boom ever. and the question is... what`s next?
"What's next?"? Well, what follows a boom, usually is a bust.
@@Commando303X And the cycle keeps repeating.....in aggregate money will compound over a multi decade period in the S&P 500 as long as american businesses do fine
That's also why Warren recommends investing in an Index fund for an extremely long term too. Warren often relates how the Dow Jones Index grew from 66 in 1900 to over 11,000 100 years later and also if Index funds had been around in 1942 how someone could have turned $10,000 into $50,000,000 in just under 80 years ($10,000 would have been outside the realm of all but the wealthiest investors in 1942 and 99.99% of people would have sold their investment a lot earlier!!).
If you have a 30 year time horizon you are fine. The reason why they stock market has done so well in the past 12 years is the federal reserve keeping rates at near 0. Our market is manipulated by the fed and no one has anywhere else to put their money. Just keep investing in the long term. You will be fine
The S&P has risen a staggering 52% in the last 2 years alone.
Which snp 500. There are multiple.
VOO
or IVV for example.
Fondamental ,,,, tenir compte de l irrationalité et donc étaler dans le temps ,,,,
As the last decade (2010 - 2021) yielded such superior returns (Nasdaq 10x), very likely the next decade will be similar to 1999 - 2009 (ZERO Return). I think this may be the decade for "individual stock picking" (even though it is extremely difficult with higher probability of failure).
Index investing may yield very very suboptimal returns for sure over next 10+ yrs.
2009 was super bunk because of the housing bubble, unlike 2021 the pandemic really didn’t affect the market nearly as much as the 2008 crash so I think those are interesting dates to compare. I think it would be interesting to look at 2010-2019
And 1999-2007
I mean you extended the 2010 decade by 1 year to show additional growth instead of using 2010-2020.
What if I want to put a big chunk of money?
I recommend that you split the large sum of money by 12 or 24 And then each month you put in a certain amount. Dollar Cost averaging.
@@dipaknadkarni62 Why do it this way? why not put the big chunk of money and keep putting money over a long period of time. It's the same right?
@@ruben5233 because you dont know what the market will be doing in 12 months. You might have 10k now and think this is a great price to buy, but then in 12 months it might be 50% down. If you averaged across that year you wouldnt be anywhere near 50% down and you would have averaged down.
I think you can put lump sums down at good prices, but dont put it all, combine it with averaging.
But then the next year you have 10k more to put in that you will be able to buy for a cheaper price. Also, the s&p goes up 8 every 10 years. Your DCA only helps the 2 years it doesn’t
"Just buy spy shares bruh"
-Juarren buffe
Ever hear a drunk warren Buffet? Listen to this at 0.5x
Ever heard him on coke.. thats 2x folks. Youll also get heroin Buffett at 0x..or if you mute it (just goin with the joke here)
If you're planning to be in for a long time, a lump-sum strategy beats dollar-cost-averaging. So if you have the money, put it in all at once
so you know better than warren buffett?
@@cletus2941 lol i just know the literature. It's facts. You can run the simulations yourself. Read this by Vanguard (open the pdf in the first result when you search it on google): "twentyoverten dollar-cost averaging just means taking risk later". Read also this amazing article by Nick Maggiulli: "Dollar Cost Averaging vs. Lump Sum: The Definitive Guide"
That's sound mathematical logic, but only if the "long run" is reasonable for your lifespan. If you inject a large sum at what turns out to be the market-peak, just how much time will it take to make up for a down-turn? Pit this against dollar-cost averaging.
Up-front lump-sum sounds better on paper, and in retrospect, than when looking forward in real circumstances. The theory of greater returns must be balanced by the recognition of perhaps-markedly increased risk of loss.
Totally agree. With the risk that is out there now though i think i would add some put options to insure myself (if all the capital is in the index fund)
Yeap i agree with this statement too. However dollar cost averaging works especially if one adds substantially more whenever the market is at a downturn.....
The Index Bubble is real.
So are many others incl the US market as a whole.
Throw your money in and spin the wheel!!! The casino is always open!!
You do not understand what a stock is. And if I had to guess, you chased a hot market and got burned. That’s not investing.
@@mellocello187 I definitely know what a stock is and I 100% know how to trade and read charts. As far as getting burned? 😂 Nope. So good job at assuming wrong. Been loading all my winnings into Bitcoin and ethereum since last year. Nice to see the rocket taking off 😁
@@shaddo912 haha. Amazingly able to refute your own argument in such a short space. Good luck, you’ll need it.
@@mellocello187 Why will I need luck? When you know what you are doing you rarely lose. Nobody wins 100% of the time but as long as you are in profit at the end of the year the few times you lost doesn't matter. You assume that I don't trade or invest by a joke I made that clearly went over your head.
Charlie Munger nailed it
Statistically, Buffett's advocacy of dollar-cost-averaging fails in comparison with up-front lump-sum investing.
He didn't pass you the peanut brittle
😃
The problem withetf's right now is the price is to high especially with ai rally if you buy it high and when you sell and it is lower you lose. It really is that simple right now etf's are super popular tough to make a profit right now on them.
I am a multi millionaire thanks to Index Funds!
Pass the peanut brittle!!!
Everything you need to know. From a couple of old white guys
"I must say that we have very good packaging." - Charlie Munger
Yes we all heard it. Not worth quoting. Just more for landfill.
I have been doing crypto for a long time and that has given me a life. I wish I understood how Index Funds works so I could have another source of income but the videos I see online don't help 🤦♂🤦♂💔
Though it made me some money in the past I would say for one to make the most of it you have to be patient. There is not enough volatility to make money. That's literally the reason why I prefer Cryspto, you have a number of choices like trading, staking, arbitrage, and the rest.
DeFi is what got me my dream house, it's literally freedom and the fact so many people don't know about it is crazy. From lending, staking and providing liquidity. The benefit is just endless.
These things take time, my friend. You can't to get enough knowledge from watching videos only. And I'd advice you make research before you buy or get an expert!
I love that I can hear about Jennine here. I don't do so much of index anymore since I met here... So far I have been able to make 150k from just providing liquidity. But there are still people who are making it big with index though.
@M. Downing She will break things down for better... That's her Telegam-user below👇
I was at a retirement seminar and the speaker spoke on how he quit his job after he made well over $450,000 PROFIT within 1months he invested $120,000. I just began investing and i will really appreciate any tips or helpful guide.
Just seek professional help from a mentor or a financial adviser.
I’m a new investor as well and I use a broker Joanna Maliva Lee she’s been guiding me with my investment since I began late Sep and I’ve been able to accrue a profit of $326,000 with a principal of $85,000
that’s amazing
Wow I always wanted to invest with a professional but I never knew how to go about it please how do I reach Joanna and how does she help investors
Almost 400% return in a month is not investing, it's gambling. Dangerously.
Wow what a idiotic question