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Discussion Starter #1
With the end of November in sight, North American stock markets are producing crushing returns.

2009 YTD Returns

DOW +18.6%
S&P500 +22.9%
S&P/TSX +28.6%
NASDAQ +39.2%
 

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With the end of November in sight, North American stock markets are producing crushing returns.

2009 YTD Returns

DOW +18.6%
S&P500 +22.9%
S&P/TSX +28.6%
NASDAQ +39.2%
Very nice returns but it is not off the charts. I count at least 5 years in which the TSX Composite returned better than 30% since 1970. The S&P 500 has 9 years in which gains were better than 25% in the same time period.

That's what stock markets do. They go up fast and can come down just as fast.
 

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What are the odds that all those people who complained about their 30% losses in 2008 will stop whining now?
It takes about a 43% gain to make up for a 30% loss. Not to mention that the stock market lost about 50% of it's value from high to low. That takes a 100% gain to break even. However, it's nice to see that we're moving in the right direction.
 

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Time to stop buying. Let the crowd to take it higher.
S&P 500 around 1250 at the end of 2010, and then up to 1700-1800 at the end of the bull run in 3-5 years.
 

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True CC, you would have to have held your positions through the whole scenario for that to work. Some will have successfully been out and in the market, some unsuccessfully in and then out, and once it jumps back up back in again.

With 100% recoveries needed markets up 18% - 39% really isn't anywhere near "off the charts" territory. Nor is it reason to let someone else do the buying. Of course there will be peaks and valleys to navigate or ride along the way as always.
 

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Discussion Starter #8 (Edited)
It is true that if an individual invested $1 and suffered a 50% decline, it would take a 100% return in the following year to make it all back.

However, this assumes that the investor stood by as one of the biggest buying opportunities arrived and didn't do anything.

It is equally true that if an individual invested $1, suffered a 50% decline, invested another $1 during this opportunity that they would only require a 25% return to get back to par.
 

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True CC, you would have to have held your positions through the whole scenario for that to work. Some will have successfully been out and in the market, some unsuccessfully in and then out, and once it jumps back up back in again.

With 100% recoveries needed markets up 18% - 39% really isn't anywhere near "off the charts" territory. Nor is it reason to let someone else do the buying. Of course there will be peaks and valleys to navigate or ride along the way as always.
If you invested all the portfolio cash at the precise market peak, then yes, the markets have not recovered yet. In the same vein, unless you invested all the portfolio cash at the precise market bottom, you are not up 50%.

That being said, what I'm looking for in stock market investing is a 3% to 4% better return than I can get with the alternative of sticking with fixed income. That's the criteria for success. And by that score, the market recovery puts me in that ballpark, even if the markets are well off the peak.
 

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Some will have successfully been out and in the market, some unsuccessfully in and then out, and once it jumps back up back in again.
I wonder what peoples real numbers look like. I sold nothing, added many positions, and am down only marginally now - and we made lots of new acquisitions in my wife's account. Personally, I don't know too many people who were selling nor buying extensively during last Oct-Mar.

There are the high profile cases of the seniors who lost 50% due to aggressive allocations, hopefully they didn't sell at the lows. You never know with the media :p
 

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So far this calendar year I am up 18% in my RRSP (from Jan.1). I am still down about 20% from the peak in July 2007, but who isn't? Overall I have a net positive return since inception, although my IRR is pretty pitiful right now.
 

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So far this calendar year I am up 18% in my RRSP (from Jan.1). I am still down about 20% from the peak in July 2007, but who isn't? Overall I have a net positive return since inception, although my IRR is pretty pitiful right now.
Ditto.
Still down about 20% or so from mid 2007.
IRR sits at around 5%.
I invest when I have money (only about 2 or 3 times a year).
It takes several months for me to build up an amount worth investing.
Therefore unfortunately I cannot market time and take advantage of good buying opportunities.
Between Jan 09 and April 09 I had to let many great buying opportunities go begging for want of investable cash.
 

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I wonder what peoples real numbers look like. I sold nothing, added many positions, and am down only marginally now - and we made lots of new acquisitions in my wife's account. Personally, I don't know too many people who were selling nor buying extensively during last Oct-Mar.

There are the high profile cases of the seniors who lost 50% due to aggressive allocations, hopefully they didn't sell at the lows. You never know with the media :p
I've been far too uninvolved in my investments to have made (back) anywhere near as much as I could have, or prevented losses last year, and in 2007 in some cases. That said my moderately aggressive RRSP is up over 30% YTD, close to 40% for 12 months, but lost 48% last year. I also have two work pensions that I don't really control, and two other accounts, one being a fairly new minuscule TFSA with one stock with a minimal gain. The other my main account that is mostly not invested (~10.7%) in the stock market. I've not put in much effort here lately either. And with that said it's still ahead of the aggressive account. Really that shouldn't surprise anyone after a large correction.

So long story short I fit your statistic of not being very active. :p
 

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I wonder what peoples real numbers look like. I sold nothing, added many positions, and am down only marginally now - and we made lots of new acquisitions in my wife's account. Personally, I don't know too many people who were selling nor buying extensively during last Oct-Mar.
A quick check tells me that the total portfolio (RRSPs, taxable accounts, RESPs but not TFSAs) is up 43%, including additions, dividend reinvestments and rebalancing. I was buying heavily in the Oct-Dec markets but other than regular contributions, I don't think I added too much to the portfolio. So, I'm chalking this up as an excellent year.
 

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CC -- I'm curious why you included additions in your calculation. Unless I'm misunderstanding you, I can turn my portfolio positive by adding funds, too. But that has nothing to do with investment growth...right?

(Also - side note - as of yesterday I am *finally* fully invested with no cash held back. I went 100% cash in July 2008 and got back in very slowly over time. And no one I know, not even my husband, really, is interested in this as a Facebook status update...)
 

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CC -- I'm curious why you included additions in your calculation. Unless I'm misunderstanding you, I can turn my portfolio positive by adding funds, too. But that has nothing to do with investment growth...right?
You're absolutely right. I'll have to deduct additions to the portfolio. It's quicker to look up how much the entire portfolio has grown.

If you ask me to guess, I'd say the returns (excluding additions) clock in at 25 to 30 percent, in line with the markets since I'm almost fully indexed.
 

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It is true that if an individual invested $1 and suffered a 50% decline, it would take a 100% return in the following year to make it all back.

However, this assumes that the investor stood by as one of the biggest buying opportunities arrived and didn't do anything.

It is equally true that if an individual invested $1, suffered a 50% decline, invested another $1 during this opportunity that they would only require a 25% return to get back to par.
That is easy in theory, but I found very difficult in practice. Firstly, it is next to impossible to know when you've hit bottom. I was way too early with investing available money -- probably mostly when the market was between 11,000 to 8000. By the time it dropped lower, I had very little extra investing cash or nerves left. Aside from that, even though my wife is pretty understanding, she started to get a little nervous about our constantly deteriorating portfolios. Then you had very experienced investors saying that the market could go as low as 5000.

I did some things right -- at least I didn't panic and liquidate my portfolios. All a good learning experience. Next time I'll try to be more prepared (and go slower).
 

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"If you ask me to guess, I'd say the returns (excluding additions)...." What is your excuse for guessing when there are spreadsheets you can use or create your own?
I compute my returns at the end of every financial year. It's my financial book keeping time... tallying up the net worth, portfolio return etc. The point is I have to calculate the inflow to the portfolio. I do that at the end of the year.
 
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