Originally Posted by
TegridyFarms
Food for thought:
https://www.cnbc.com/2018/05/07/warr...ion-today.html
This guy can’t beat the S&P. He’s the GOAT of investing.
Jim Cramer who is a prophet to some, and a fraud to others, he can’t beat the S&P.
Investing in the S&P is investing in America. Is it 100% of my portfolio? No. It’s 100% of my 401k though. Outside of that I have had some incredible luck since the market crash of 2008. You guys can compare percentages and strategies all day, bottom line is S&P with DRIP (dividend reinvestment program) is tough to beat over time.
Interesting side note is that the S&P is basically turning into a tech fund now. Will be interesting to see what happens over time... but I wouldn’t bet against American companies.
By no means am I here to pursued you to deviate from what makes you comfortable. But I’m living proof that the s&p can be out performed.
It is ESSENTIAL I compare percentages until I’m blue in the face because you must keep score. If anyone uses an advisor, I challenge you to demand their annualized rate of return versus the S&P 500. 99% chance they don’t track it and will reply with some nonsense as to why.
The traditional wisdom you mention is accurate regarding outperformance of the S&P but I ask you, compared to what? John Smith, individual investor? Or Mega Fund actively invested fund? The traditional wisdom is often comparing the S&P to the ladder. Actively managed funds charge a higher fee and therefore people demand ACTION for that fee. The ACTION the funds take is what kills their performance. My point is that you can concentrate your portfolio and do NOTHING and outperform the S&P by holding great companies, many of whom are listed on the S&P.
The argument is that the law of averages will return my peformanxe to that of the S&P, but this is why Its essential that track performance. If it ain’t working join the crowd and index, but given a 12 year collection of data I’m beginning to see the reality of out sized performance. It’s astounding what outperforming by 5-10% annualized does to a portfolio when you run hypotheticals on a calculator.
Just consider who is telling you that indexing is the only way (institutions, media) and if it’s an advisor demand their performance versus the S&P. And whatever you do, accept no less than the average, it can cost you millions in the long run!