Read? Counting The Opportunity Cost Of Rotting Cash
Assuming 5% dividend yield per year on yearly accumulated war chest not invested since 2012; the opportunity cost to break even to cover those missing dividends from 2012 to 2022 is about 50% ROC on current war chest.
50% is not that scary!
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Hmm i suspect the next couple bear mkts may be normal -25% to -35% types.😉
ReplyDeleteThose millennial investors may be very happy with overall returns over the next 10-15 years. 😏
Should we wait or invest now?
ReplyDeleteDepends on ur needs & timeframe. If already enough or need to use the money within 3-5 yrs then is there a need or ability to remain heavily invested in risk assets? 😉
ReplyDeleteOtoh for those 30-something or those looking to grow a large amount 15 yrs down the road ... a -30% decline in 6 mths followed by an 18-mth recovery is just a bump in the road.
Even for retirees ... if already set aside enough cash to cover 5-8yrs of expenses ... rest of assets can be in strong dividend paying stocks or sound rental properties.
Stocks in general have spent 16 yrs (2000 to 2015) in a long basing pattern. Slightly longer for Asian stocks due to AFC payback for the Asian Tiger go-go years.
ReplyDeleteSimilar to 14-yr basing pattern for many global stocks from 1969 to 1982. Long term secular bull followed even though scary corrections / recessions along the way.
Not predicting it will repeat but i won't be surprised if it rhymes going forward.
temperament,
ReplyDeleteThen don't play big! Not as if you need the money to "escape" or be financially free ;)
Take 10% of your networth to tikam tikam, past time, ease finger itch, etc.
When young, we can "invest" everything we have; no need emergency fund!
Lose eveerything we can easily recover in a few years.
How much can we lose at that age?
Now? Don't lose money is already for the win liao!