There is a chart at http://www.nytimes.com/interactive/2011/01/02/business/20110... that shows the average annual return for an investment in the stock market broken down by year of the start and end points. The returns are high if you invest early in a bull market and sell before the next crash, otherwise the returns are rather low. The conventional wisdom that holding stocks for several decades and getting annual returns of 7% or more seems wrong.
It really makes me wonder about investing my savings into my tracker fund when I saw that. I'm in the UK, and my guess is, due to very tight correlation between the markets we did the same sort of performance.
So long term, market beating, savings beating growth, is not assured. Especially not in "developed" countries. If you think the GDPs of Western countries is going to start increasing (significantly) any time soon, please explain why!
So if it isn't assured, I've been looking into index tracked funds in other markets, particularly APAC. Not sure if it's a great idea, but probably better than a UK indexed fund. I figure it's probably worth a try.
It's totally about when you put in. My parents are still down on a couple of their funds from 1999 ish. Break even happened just recently for them. They'd have been better off with that cash in a long term cash bond.
Why are there so many angel investors right now? Because only high-tech is offering any appreciable growth in the USA.
Having just scanned the rest of this thread. My future plans:
* max out the company pension scheme in terms of contributions.
* continue to max out the UK tax free savings & investment schemes. It's only £10k ish a year but it starts adding up pretty quick.
* Currently almost half my cash savings are not in the UK, as interest rates here now are poor. I am considering an additional offshore savings account in an interesting APAC country. Maybe Singapore, as many rich people in APAC do their banking there.
* property - I expect I will look into forming a Ltd company as a holding company, where any income is heavily re-invested. This will probably be seeded with a small inheritance, or my cash savings if I don't burn through them when I get my business off the ground
* Yes, I will be investing in myself. One month in to 2011, progress is slow, but I will have a spare time business running by the end of the year.
After using Ubuntu for three years I switched to Arch Linux and I like it a lot. It has a great package system, and packages are updated continually. I upgraded my desktop to Gnome 2.30 a few days ago with only a couple of minor issues.
I wish the author had been more clear here and cited his statistic, but he's mostly right. The report "High School Dropout and Completion Rates in the United States: 2007" (http://nces.ed.gov/pubSearch/pubsinfo.asp?pubid=2009064) has a graph showing that the middle income dropout rate is about the same as the overall rate. The upper income students make up for the lower income ones. And according to the report at http://www.americaspromise.org/Our-Work/Dropout-Prevention/C... "Nationwide, nearly one in three U.S. high school students fails to graduate with a diploma."
I Agree. My father is an accountant and hate doing taxes. He would much prefer a more simple method like this where it would be harder for errors to occur and avoid lengthy audits. He makes much less from those government audits than from other type work.
The complexity of the Tax code is also stupid. A lot of it could be simplified but that would eliminate government jobs quickly. Accountants won't care, there's a lot of lucrative work that still needs be done. In fact, most tax returns aren't done by CPA (or CA in Canada) anyway. H&R Block and others might be pissed and try to block this but they charge too much anyway.
