Warren Buffett: Should you buy Index Funds at All-Time Highs?
ฝัง
- เผยแพร่เมื่อ 29 ก.ย. 2021
- When Warren Buffett speaks, I listen. But there's one thing he's never explicitly covered. Whether passive investors should pause their ETF and index fund purchases in wildly overvalued markets. Over the past year, we've seen the S&P 500 continue to push to new all-time highs. But does this mean passive investors should wait to see if the market cools off?
★ ★ PROFITFUL ★ ★
Learn to Invest with Brandon van der Kolk (BUNDLE OFFER) ► bit.ly/learntoinvestbundle
Learn to Master Your Tax Return (SPECIAL OFFER) ► bit.ly/3127TdE
Join the FREE Profitful Investing Community ► bit.ly/3bfppQb
Business enquiries: aussiewealthcreation@gmail.com
#warrenbuffett #passiveinvesting
DISCLAIMER:
Neither New Money or Brandon van der Kolk are financial advisers. The information provided in this video is for general information only and should not be taken as professional advice. There are risks involved with stock market investing and consumers should not act upon the content or information found here without first seeking advice from an accountant, financial planner, lawyer or other professional. Consumers should always research companies individually and define a strategy before making decisions. Brandon van der Kolk and New Money are not liable for any loss incurred, arising from the use of, or reliance on, the information provided by this video.
My portfolio doesn’t just cater to dividend stocks. I hold $VFIAX (S&P 500 index fund) in my Roth IRA and $VTI (Total Stock Market ETF) in my taxable brokerage account. Two of my largest holdings. The individual dividend stock positions all complement the index holdings.
If you lack market knowledge, your best bet is to seek advice or support from a consultant or investing coach. Contacting a consultant may sound simple, but it's how I've managed to stay afloat in the market and increase my portfolio to roughly 60% early this year. It is, in my opinion, the best way to get started in the industry right now.
There are many independent advisors to choose from. But I work with Monica Shawn Marti and we've been working together for almost four years and she's fantastic. You could pursue her if she meets your requirements. I agree with her.
why not have VFIAX in both? And why not VTSAX in your IRA? Curious because I just bought VFIAX for my IRA and voo for my taxable account. I didnt know about VFIAX when I bought the voo shares.
there are 2 amazing quotes from WB!
1. During the latest Yahoo Finance conference he said: "I've never suggested buying stocks from my companies but always indexes"
2. "Time in the market rather than timing the market"
NO need to add more!
Always invest. Today's all-time high is the future's fire sale price
Very true!
Let's hope you haven't invested into the NIKKEI before 1990s
@@ohno1954 but very few invested all at the top. If you buy a little bit each paycheck you would not have bought it all at the top. That's also where diversification comes in and you should have international stocks
Yeah this aged like milk
@@danielb8982Did it? If you bought a world index in September ‘21 you would be up over 20% today.
To anyone who made ''only'' 12% year return while the market went 15% up on a given year. You've made 12% more than the majority of people who spend every paycheck they earn.
I put it into VDHG a few month ago. Thus far only a 0.89% increase :(
@@ashleyn1979 My investment in the QQQ currently has 1.5% increase. But my other investments in bluechips I've made along the way has caused my portfolio to be overall negative. Tesla, my largest investment after QQQ, has thankfully mitigated a lot of the losses. So I think you're actually doing fine. In the short term, we may experience a deeper correction and experience further losses but if you have a long time horizon, keep going at it and you should be fine.
@@shauntay0248 cool. Yes as long as the investment gradually increases over time.
lol i'll keep this in mind as my portfolio is in stagnation these months
Very, very few are averaging 15%, even in this bear market, I have a few positions doing that well, but my “average” is a few points below that!
Those in their retirement years need to think about this carefully. Someone in their 20's should be able to spend several years or decades weathering a bear market and recovery, whereas someone in their 60's and older may not be able to.
Very good point Das. That's actually one of the reasons I really like Six Park. They are passive investors through and through, but help you balance your portfolio based on your investing time horizon!
Definitely. One way is increasing the amount of bonds in the portfolio. Maybe a 50/50 portfolio is appropriate when in age 50+.
Exactly this, I'm 28 and started investing recently. All the bubble talk doesn't scare me because I know that I'm leaving my money in the QQQ, SPY and DIA etc for 20 - 25 years during which the market will continue to grow. But I can totally understand how continuing to put money into the market nearer to your retirement years could be scary.
@@NewMoneyTH-cam What's funny is that as a long term passive investor, I am still somewhat drawn into the "active" component. I already maximize our Roth 401k's, and in addition do backdoor Roth IRA's. My accountant tells me to invest all 14K (7K each, since I'm 51) one day, and convert to roth the very next day so I don't create any taxable income (my wife has a prior IRA Rollover and it gets complicated with prorata etc) so I find I'm in a weird way looking for a low in the S&P to pull the trigger. I've always used Vanguard with a cost ratio of 0.04 and been a huge believer in passive investing in the long term, but I have no choice but to "try to time the market" in this one scenario lol.
@@Tomas-tx6lq the original study about the 4% rule found out that the less risky portfolio should have 70%-80% of stocks and 25% or less of bonds, and the historical data taken in that study considered bonds that were yielding much more than current bonds; so the less risky asset distribution probably would have less bonds now.
Just to clarify: I'm talking about the risk depleting all the savings during retirement, not the volatility.
All time high is subjective to the time period we're operating in. People would have been saying the same thing 50 years ago because the market was at whatever arbitrary value it was at back then but it's always on a long term upward trend. Provided your asset allocation is appropriate for your situation, you should avoid altering your strategy. Today's all time high is next decade's value purchase!
And look where we're at now in May 2024, the Dow Jones hit 40,000 for the first time or 10,000 points higher than when this video came out 3 years ago!
Stay the course! Yes the markets will crash and a few will even guess the timing right and be viewed as investing Gods and everyone will completely ignore the 37 times they got it wrong.
Early saving and investing money creates
compounds growth, it's a beautiful thing.But
it takes focus and discipline. You need to be
focused enough to commit to a plan and a
process.I’m a dividend investor, my wife and I have invested in the s&p500, both through my TSP with the government and through fidelity in her 401-k. Cashed out 370k from the S&P and invested with a full service broker.. Until about 3years ago we were 100% in the s&p after over 30 years. I’m retiring at the end of the month at 59, while my wife will retire next year at 54. We currently have 5.7 million in out tex deferred savings.
@@patrickmorris6628 SCAM ALERT
SCAM ALERT
Scam
When your young, aim for growth and capital multiplication. When you’re old, preserve it and spend as you see fit
I have been following your videos for Months now and i have been wanting to make outstanding progress with my investment. Truly, The SP500 is a self-correcting portfolio, Following this principles, i want suggestions as to a way to protect my portfolio of $580k.
Hoe do I Find this Lady?
How do i Find this counselor?>
Time protects you not advice from shills that will follow.
Thanks for the effort to compile these great bits of wisdom and summarizing the goal of passive investing and dollar cost averaging.
Everyone always shows that clip 2:42 where he says if you'd invested $10,000 in 1942 but in 1942 that was a lot more money than it is today, the average wage in 1942 was $1,885
True, but the growth percentage is still the same regardless of the dollar amount. If $10,000 would’ve become $51 million, $1,000 would’ve become $5.1 million. Even $1 would’ve become $5,100.
Inflation should be considered
Hamburger used to cost
@@omkarbhagwat895 considered how?
We are still trying to achieve the best return possible. That is independent of inflation because everything is subject to inflation.
If you invested anything in 1942, you are 99 percent likely to be dead now.
Thanks for this informative video! it's easy to become afraid to invest when market is at an all time high because of the inevitable crash. But like you said, the all time high now is nothing compared to 20-30 years from now. Your video is a great reminder to continue to DCA and stay the course. Thanks!
Anyone has a though about the following: dividend tax rates differ from country to country - in my country it is 35%. additionally you need to pay brokerage costs for any additional transaction and some country specific taxes for every purchase or sale totaling around 1% per transaction. Does it still make sense to purchase an S&P500 index and reinvest the dividends?
For new investors a lesson from Warren Buffett is : always wait for right opportunity when you there is euphoria sit calm and wait for explosion and after there is silence in market just buy at the lowest possible and keep follow up of your holdings
It's always funny watching people say DCA and then also say "time in the market beats timing the market" because DCA (keeping money on the sidelines) is inherently timing the market.
That's a good point - though several of the bits of advice from Buffett and other sources referenced here might say "put in a little bit every month" or something not necessarily to DCA, but to be on a similar schedule to paychecks/cash inflows. So in this case it wouldn't be keeping money on the sidelines, but rather investing whatever portion of your income you feel can afford to at all times, repeating the process as you accrue more $.
Your general point about the dissonance between those two statements is an interesting one though.
For most of us each months contribution is literally new money earned by earning a paycheck.
For most people DCA doesn't mean keeping money on the sidelines, it means invest whenever you can - ie every paycheck
I mean they would just have to take a calculator and put in the numbers, even if a crash is right in front of you, time in the market would still be only marginally worse, in any other scenario... Well I doubt we need to even talk about those
The best strategy would be to do a lump sum investment (i.e., whatever you have saved up till this point) if you are investing for the first time. Then you can follow up with DCA when you receive your monthly income
Great video! Where can I find this paper from Warren Buffet? Would be great to read 👍
I have 35% of my capital investments in an IRA, 25% in index funds, and the balance spread across other investment accts totalling over $250k. I took a big hit in Q2, 2023. Right now i am just looking for ways to recover.
Although I've made a lot of financial mistakes in the past, I don't regret them since I've learned from them. The most significant one was entering the market without experienced professional counsel.
Think the best idea is to speak with a financial advsor. I also had a fair share of ups and downs when i first started investing, until I consulted a financial advsor in 2021, since then I've made over $670k in profits
Impressive! Please who assists you with your investment and if you don't mind, how do I get in touch with them?
‘Christine Jane Mclean is her name. She is regarded as a genius in her area and works for Empower Financial Services. By looking her up online, you can quickly verify her level of experience. She is well knowledgeable about financial markets.
I just looked up her name and her website popped up immediately, interesting stuff so far, about to schedule a session with her.
Really good video. I think it would be really interesting if you were to show example calculations of DCA returns
at different frequencies and over different time periods.
Most times, splitting your one time investment into many small investments will loose you money, because most of your money is sitting idle. Time in the market beats market timing. But, yeah, if you are afraid to invest a large sum right before a crash, then go for it.
Also, if you take the MSCI World chart and color in every all time high, you will have a very colorful chart. A large percentage of the historical MSCI World chart consists of all time highs. One after the other.
Yes but having cash available is really important, it means when everyone else is scared and selling because they put their entire life savings into the market just before a crash, you'll be able to comfortably invest to take advantage of the lower price. A mix of both is good
@@BIG2hats to the context of passive investing, actually, no. There have been papers comparing the difference in returns between DCA and LSI, and found that 71% of the time, LSI delivered better returns. HOWEVER, you are right that the difference is not simply financial. LSI brings in investor's psychology, and you might be stressed or badly regretting if you bought at the wrong time. That stress may not be worth the marginally better returns.
@@MikelSyn some people don't have lump sums of cash to invest all in one go, so most people have to pound cost average every month or put their money in when they have some available
@@fredatlas4396 the papers were specifically in context of having a certain sum of money, which you either immediately invest entirely, or DCA/PCA over the next 12 months. If you're a salaryman, investing a portion of your salary, then yes, DCA is obviously better than saving it up till the end of the year to lump sum. The paper is merely stating that the time in market effect is so powerful that delaying investment by just 12 months results in less money.
This does apply to annual bonuses that you may want to invest. It's better to invest all that bonus immediately when you get it than to spread it out over 12 months.
Brendan thank you so much for making this video !! This question was actually bothering me a lot, and we are new passive investors ..
Still learning a much from you mate. You’re doing a great job.
10:09 nailed it 👍
An all time high means it's growing in value over the long term which is the objective. Also can't ignore record low 0.1% cash rates which are increasing equity valuations above historical standards when cash rates were 18% 30 years ago
As a beginner should I buy stock directly or use a stock broker?
I've backed off my routine investments by half. When the market comes back to reality a bit I will resume my regular amounts. For the time being, I am just banking the difference. I just cannot ignore the fact that I feel the market is extremely inflated at the moment.
Have you thought about keeping some money in stablecoins? No price fluctuation and some places offer upwards of 9% interest.
You sound silly boy
You're not wrong. But you're also likely to miss some very big days when the market bounces up later.
Good luck trying to get on toward the bottom. I've tried and it is harder than it sounds.
so how spread out over time and how much should these incremental investments in index funds be?
Considering the cost of brokerage associated with investing in ETF’s is there a suggested minimum amount to invest per dollar cost averaging round? (As opposed to manager finds with dollar cost averting minimums of as little as Au$100/month with no associated brokerage fees)
Find "no transaction fee" situation.
I'm pretty sure Fidelity doesn't have transaction fees if you look for them and and I doubt any of the other big firms do either. Check ahead.
I did learn not to buy a vanguard fund in my fidelity account. I think I had to pay 75 bucks to sell or something like that. Maybe even 0.75%. I don't remember anymore but I would never do it again.
Brilliant. Simple. Great illustration from 2017.
Thank you! Cheers!
I was pondering on this question for weeks now. THANNNKKKKKSS
Thanks for watching Tess!
Congratulations. You missed out on a considerable reduction in market prices already.
Great video thank you
do you put AFI in this index fund/ETF category?
You might as well spell out the acronym. We aren't going to look it up for you. 🤷😁
But if you put a lump sum if money into an index fund after a big crash, wouldn't you do better? Why only shoot for average?
1. Because you dont know when the crash will happen.
2. Because you dont know whether you will have the mental strength to go against the crowd when market crashes.
You don’t know when that will be BUT. On average the more % the market is down from its prior high, the more likely you are to have a great performance the coming year.
Buying when the market is down 20% yeah it’s good. 30-40% yeah buy more than you are comfortable buying tbh.
How often should we be buying though
Every month? Quarter or year?
First watched this channel which had a different name two years ago and became inspired enough to drop $10,000 into VAS. Now watching a few years later and realised the mistake of not dollar cost averaging... Would have caught some of the lows during the pandemic... Moving forward, it's going to be regular investments.
PS. cool animated intro!
This is actually a mistake.
If you had done DCA over, let's Say 2 years, it was just as likely to have collapsed just at the end of the 2 years as during the 2 years. You're actually trying to Time the market even though you think you're not.
DCA makes sense if you're investing part of your income regularly otherwise it doesn't.
For a lump sum, on average you'll just lose the average returns on the cash you don't invest asap. And you're just as likely to get a wrong market Time just After you finished investing your lump sum over a period as you would have been buying everything from the start
Generally yes but time horizon is important. If you have 30 years ahead of you then dollar cost averaging is statistically the best thing you can do.
30 years? Thats for kooks. I have 60
Over a long term horizon, lump sum investing statistically beats cost averaging two thirds of the time.
@@ianmcat no. Ask hedge funds and their statistical ×100 Bloomberg terminal per computer
Hmm, wouldn't it potentially be the inverse? E.g. The longer your time horizon is the less it matters whether you are buying in at a short term high, even if there is a drop that lasts years, you'll come out ahead in the long run and the missed opportunity for savings on asset prices/increased gains will be a smaller % of your long term increase. Whereas if you are looking at a shorter time frame for when you want to realize your gains and make use of your money, failing to dollar cost average heading into a dip could have a more significant effect on your earnings?
I think Dave Ramsey and another channel said that dollar cost averaging an index fund is not ideal , that lump sum investing if you had the lump sum like you said $100,000 you should put it on all at once when you have it. Now I haven’t looked into either ones so much but just thought I’d chime in with that.
Hi Brandon, thanks for the informative videos. Have been learning a lot from you. I have one question, about age. I'm now 50, does this method of investing still work for me?
Philip Fisher (Common stocks and uncommon profits) also recommends to avoid invest the whole amount in once but scatter investments in a 3 years period instead. Additionally, I agree DCA shall take place even in high valuations as you never know what's next. An idea that can boost performance above average is to increase investement amounts (as possible) when market is at low P/Es.
Love this!
Hi Stefano from Italy. Thank you for ypur video a very wise advice.
I am currently investing in my house. I had some stuff that needed doing, so I am spending my money on that. Messes with my investing routine, but can't be helped. It will pay itself back when I sell 3 years from now.
Excellent video. Thanks for compiling this- from the UK.
It did put my mind at ease thank you!
You are incredible. Greetings from Brazil!
Really enjoying your videos, keep it up :)
thanks- very helpful
Buffett probably recommends the index fund because the people asking for that advice can't properly evaluate financial statements. He makes *way* more money picking individual stocks. He started out with aggressive value investing, but it wasn't scalable. (Berkshire tiling company went bankrupt.) When he linked up with Munger he scaled up by buying "great companies at fair prices." Buffet bought insurance companies and invested their cash float. The goal changed from making money to keeping money safe with moats. Buffet's work is his investment; other people buy index funds with regular salary contributions. Essentially his advice for others is to save effectively, but it's not proper investing; it's unreflective.
He makes way more money because he borrows money from his insurance companies to leverage his investing.
The guy has been doing business since he was like 5 years old. For the rest of us, just take his advice and do passive investing. 😁
Trading is certainly not investing.
Really loving the content on this channel.
This helps a lot. I've been on the fence lately. Thank you!
Just found this channel and really appreciate your perspective. Not new to investing, but nor am I an expert. Reminders of basic principles & long-term perspective are super useful, especially in tumultuous times
I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.
Find quality stocks that have long term potential, and ride with those stocks. I have found it takes someone who is very familiar with the market to make such good picks
A lot of folks downplay the role of advlsors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850K.
This is definitely considerable! think you could suggest any professional/advisors i can get on the phone with? I'm in dire need of proper portfolio allocation.
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
@@BrewerVerafake post
Both have similar functions we winning
Fantastic content, thank you !
My problem with not putting a big chunk is you'll have to pay more transaction fees which accumulates overtime XD
Other is not getting physical dividends when buying index funds.
I don't pay any transaction fees when I invest.
Are you investing online with somebody similar to Fidelity and Vanguard? You can easily find no transaction fee (NTF) mutual funds at Fidelity.
I'm not sure if your problem has to do with not meeting the minimum required deposit amount? If that happens to be the case and the minimum is 2500 or 5,000, I might just save up that amount before investing. You aren't missing anything by waiting a few months or a year or two.
And if you're not planning on investing a great deal more than $5,000 in the next decade or two, you should reconsider investing. Investing just a little isn't going to get you anywhere.
Thank you, that was very helpful!
Great video, very helpful! Keep it up!
Great video, thanks
I like how you justify each statement with facts and figures.
It's funny b/c the S&P 500 is at an all time high due to the shiller PE ratio. But if you do some research most of the companies that have huge PE ratios and are skewing the average are companies everyone is saying is undervalued due to their growth. Only time will tell.
Several stocks are trading with a PE under 10. Oddly enough those are the ones still getting crushed while the stocks with a PE of 30+ mosey along like nothing is happening. Once those get crushed it’ll be safe to invest in the market again.
@@JC-li8kkthe ones with a very high PE probably have the largest chance of huge growth. That is why people are willing to pay the 30p/e ratio.
If you are a passive investor like virtually every normal person should be, then I wouldn't get bogged down in p/e.
Great advice. Thanks!
I wouldn't stop putting money into index funds at my age, but knowing that the market is overvalued it's perfectly sensible to reduce contributions and pay off debt until the market cools down a bit. I think it's also good to have a bit more diversity in a market like this. Being able to pick individual stocks in a time like this also helps IMO.
paying off debt is technically a great investment strategy
Couldn’t agree more
How do you know it is overvalued though? If we knew when the market is overvalued, we'd know when it's undervalued. Then we'd be able to time investments and beat the market. Which is proven over and over to be a very difficult task, possibly even impossible.
Paying off hight interest debt is great!
Once you get those out of your way, keep your fixed low interest ones, and buy a low-cost index fund.
(NOT FINANCIAL ADVICE) LOL.
@@skyfe5430 he doesnt know. he making assumptions. you need to constantly put in the money on a certain schedule. you can alaways capital allocate during your life to better pastures but the most important is to inject money as early as possible. Im talking from a fairly young perspective. if you close to retirement you might need to adjust your thinking but I dont think skipping the market will make you more money than investing regularly and theres multiple math studies that prove that. looking at only price is not investing. you not buying a home. you buying stock that you can cash out later or buy other stock.
Where can I read that paper shown on the video from Warrent buffet
There is no such person...duh.
I would Google it. It may be on the Berkshire Hathaway website. It was probably part of their annual meeting that year.
Hands down, this is one of the most important videos I've seen in Investment. Great content! 👏
I wonder if anyone has looked into a strategy of "dynamic" dollar-cost averaging: increase the contributions when the market is going down and slow down the contributions when it goes up. Any performance comparison studies out there?
Thanks!
The detail of the big chunk is VERY VERY APPRECIATED. 😮Thanks.
Around 2/3 of the time, someone who invests a lump sum gain higher returns than someone who followed dollar-cost averaging. And it makes sense because as argued by DCA, we cannot time the market. DCA and lump sum is really the same under normal circumstances - buy as soon as you can. Normally, that is the first day in every month. It only differs when you either begin investing as has a lot of saving you want to put into the market, or you come across a large amount of money from somewhere else.
With that said, I personally would probably do DCA if I came into an insanely large "once in a life time" sum of money. But, the more often you expect to come into a large amount of money in your lifetime, the more lump sum makes sense over DCA - because it is the same. Kind of.
Depends on how far down the stock has already dropped when you initiate a position. Let’s say MSFT were 40% off it’s ATH & caught your eye. You wouldn’t want to put a tiny little amount or you will likely be averaging up over the following months & years. Anything near the ATH I DCA. Anything near ATL or 52wk low I buy in large chunks. One thing I hate doing is DCA up. I’d much rather DCA down. This happened to me when I bought WFC at $22. I had a 2nd order for $20 & it never got that low. $21 was the lowest it ever got. My 1st purchase was the cheapest price I got. If I decided to DCA then my average price paid would have been $35 instead of $22. That’s a massive difference in profit. All comes down to conviction. If you know something is extremely undervalued buy large chunks. If you just want a safe bet with a nice dividend that’s fairly valued then DCA.
@@JC-li8kkI definitely would not buy individual stocks, ever. I don't gamble. 🤷 😉
Up 27% so far
Great video! Thanks. Personally, I dollar-cost-average Ray Dalio's All-Weather-Portfolio. Lots of similarities :)
According to a study conducted by US passive investing powerhouse Vanguard back in 2016, lump-sum investing generates better returns than its drip-feed counterpart roughly two-thirds of the time.
Vanguard back in 2016: lump-sum investing generates better returns than its drip-feed counterpart roughly two-thirds of the time.
This was true regardless of asset allocation (e.g. whether you had all your money in equities, all in bonds or a 50/50 split) and whether your money was invested in the US, UK or Australian markets. Nevertheless, the average outperformance of lump-sum investing wasn’t that big (2.39% in the US, 2.03% in the UK and 1.45% in Australia).
yes by a whopping 2% difference.
@@DailyDoseOfInternet well if your whole argument is that one way is better than the other. But it turns out that the other way is actually better. Wtf kinda response is 'yes, but only by a little bit'.
@@DailyDoseOfInternet 2% is a pretty big difference. For reference, a 1-2% expense ratio on a mutual fund or ETF can almost HALF your investment over a 40 year time period.
Lumpsum investing better in a bullish market. Periodic investing better in a bear market. Over a long period of time 10-20 years periodic is better
So what’s a reasonable time frame to invest 100k over ?
Amazing tips! Learn from your mistakes, and never give up! :)
Schiller p/e is not taking account fed’s balance sheet
how do you invest? do you passive invest and actively invest?
Are other Index Funds like FTSE All-World fine as well?
They're different obviously but they're 'fine' in the sense that they're good investments for broad exposure to different markets :)
God bless you I was waiting for a video like this it gave me ideas. Subscribed!
So when I buy stocks do I leave them on the exchange I bought them on?
Unless there's a problem with the service provider (fees, financial stability, political reasons) yes, you leave them as is.
I would only buy them in mutual funds or ETFs. I wouldn't buy individual stocks.
What's the best broker in Australia?
I too am confused by the conflicting info from Graham. I DCA for over 20 years, but find myself following Graham after reading the Intelligent Investor & realizing that I don’t have as much time as before. I’m a defensive investor for sure now!
I’m pretty good at picking stocks, but the most money I’ve ever made was from DCA.
Nevertheless, listen to my advice. It's too expensive right now.. I think wait for it to get cheaper for a while.
A revelation for me was that a stock can be at all time highs while the RSI is not in the oversold zone.
Brilliant video showing the power of regular drip fed index fund buying.
If you can't be a trader then don't try to be a trader and just buy, add and hold onto a decent index fund.
I agree completely matt. This video was spot on.
Set your super up to be passive etfs and make extra contributions, I'm loving the income tax deductions and it forces me to be long term whether I like it or not.
I like mutual funds because I don't have any reason to buy or sell in the middle of the day. I also like that there seems to be a lot easier access to information about the mutual funds.
is DCA works for big caps Stocks?
Dollar-cost averaging can be applied to anything, if it fits with your investing strategy!
please dont add music
I’d like to see the 10 000 turned into 51 million adjusted for inflation. Still impressive, I’m sure, but not as impressive…
About $3m of 1942 dollars. 300x gain
Pleased to be part of your work to help educate investors. Terrific insights, simply delivered. Well done, Brandon.
Cheers Pat!
So excting! Thanks for your sharring 👍👍
Wait for the dip
Hey Brandon, would love to see a net worth update seeing as your channel has grown so much.
Awesome video mate thanks hePs
Very good analysis and advice!
Please do a video on the difference between a passive investor & a defensive investor. I think there are differences. All passive investors are defensive investors, but not all defensive investors are passive investors.
Great video, I have one question which I think is relevant atm.
Would it be worth diversifying by investing in other markets - it seems the S&P may be getting hit particularly hard in the near future with inflation etc etc
Would we be wise to also invest in other countries markets as an insurance policy perhaps?
No
Our inflation is not as bad as most of the rest of the world.
And I don't think inflation hurts the S&P. Having your money not invested would hurt you.
Buffet likes the passive because it bolsters his company's stock price. He's a big part of the index.
Thank you so much! This really helped me with my nervousness to go in right now, and extra bonus -- answered my question about investing all our amounts, which I pulled out a few years ago when I wanted to get some learning under me and missed the covid bust, but all the boom. I have $200k to invest, and everything I've read says to not dollar-cost average but it wasn't sitting right with me. I'm so relieved to hear from the master -- yes, get in now, but not with all of it. Get in now and keep getting in consistently!
AAII (American Association of Individual Investors) recommends going in over 10-12 months for lump sums if you think you are a market highs, I believe. If there is a downturn, accelerate your purchases - either totally or to some extent. Time in the market matters more than timing the market. Also, each year the S&P 500 hits numerous new "highs" unless you are in a bear market.
Love this page
As someone who smartened up late, Do index funds make sense if you have a shorter time horizon? in my case about 10 years.
Just quietly don’t mention the zero returns the s&p gave from 2000 - 2012ish. So yes a long time horizon is certainly required as the market does not always go up.
So the advice for someone who recently came into a lump sum (in your example $100,000) is to hold it in cash and buy evenly and slowly into the market (eft) at regular intervals as opposed to buying in all at once? Seems doable, but if over this time span the market has a major correction it would be tempting and probably advisable to increase the size and frequency of the buys.
Yes. I’m in the same boat as you. I’ve just made a plan that I’ve committed to. I’m willing to wait 1-2 years until I’m fully invested, since these valuations are just far too exuberant for my tastes. Check margin debt.. insane speculation in the US market. And I’m no gambler. So my plan is to buy 20% into my positions when prices of my watched equities drop 12% from all time high, another 20% when 18% from ATH, etc. .. to invest the rest in an extreme downturn, I’ll watch the VIX closely, since it can signal a turn around near the bottom. At these valuations I’m not going to touch US indexes though.
@@badgerlife9541 There is lots of threads, topics and articles about lump sum vs DCA, and apparently in average lump sum turns out better than DCA in around 65% of cases, especially when it comes to index funds. Do a research, dont follow one video, then decide:)
@@badgerlife95411 to 2 years seems like a reasonable time frame.
You are a very bright and encouraging young man, and so far I have not found a video you have made that I did not like or did not help me in some way