Vanguard is index funds, so the returns are as good (or bad) as the market.

Wouldn't it be a better idea to invest in bonds or more stable sources of investment for the next few years until we can make sure of the impact of Brexit-Trump? I wouldn't be surprised if AAPL and other giant third sector companies fall in value right now.

You're talking about market timing which is incredibly hard (some say impossible) to do over a long period of time. Sure, you might miss the down here (if there is one), but then you also might miss the move back up. There is a saying that time in market is much better than timing the market. If you consistently put money in, you'll naturally also buy the downs. At that point, you just need to periodically rebalance, and with age start to shift to less risky investments.

In investing terms, you're talking about a "less risky" rather than "better" idea. You'll only know if something was better after the event in question has passed.

Passive investing when you have many years before retirement means you worry about long term trends rather than short term risks.

Ah, you see, because the market is famously perfectly efficient, equity and bond markets have already priced in the expected effect of Brexit-Trump. So investing in equities now essentially gets you a discount over what they would have cost had Brexit-Trump not happened.

Whereas (more seriously) investing in "more stable" things like bonds forces you to pay a premium, because every man and his dog has desperately been chasing stability, safety, yield, etc since 2008, in many cases using quantitatively eased money to do so.

while coupons (e.g. the regular payout) might be stable, bonds, too, can fall in value. One interest rate hike by the FED or ECB would send bond prices tumbling.

> liberal hubris

When a thread takes a turn for the worse, please don't reply unless you can make it better, not worse still. Political name-calling makes it worse still.

Since I had to ask you to keep partisan politics out of HN threads only a couple days ago, I'd like to emphasize the point. This is not what Hacker News is for. Please (re)-read:

https://news.ycombinator.com/newsguidelines.html

https://news.ycombinator.com/newswelcome.html

How is the comment you replied to liberal hubris? There is uncertainty with regard to Britain voting to leave the EU. Since the U.S. election the bond market in the U.S. has fallen quite a bit. This is unusual given that the only new information comes from the election. Clearly there are impacts from the election that an average person wouldn't be aware of. Hence the comment about adopting a wait and see attitude. While this may not be a good strategy it hardly qualifies, necessarily, as liberal hubris.

Average..? Ex., 1%-5%/yr

It depends on the fund. I just did a report on this for one of my classes. https://github.com/wihl/stats107-project/blob/master/writeup...

All the code is in the same repository as R Markdown.

MOOC or are you at Harvard? Was the course worthwhile?

Through the Extension school, all online. I found it worthwhile.

7% in the long term, but with big fluctuations.

Which fund? According to whom?

SPY / VFIAX / S&P 500 has a CAGR 4.9% from Nov 2000 to Nov 2016.

Not too long ago the long term rolling returns for the S&P 500 where still somewhere around this number. This article [1] is from 2012, not much has changed in the last four years.

"The average 30-year rolling total return for the S&P 500 starting with 1926, is 2,478% or 11.21% annualized (geometric mean). There were several 30-year periods that had annual returns between 8% and 10%."

Having said so, past returns don't guarantee anything for the future. They might give you an indication though.

[1]: http://allfinancialmatters.com/2012/08/29/sp-rolling-total-r...

Edit: Here's [2] a better (?) graph of the S&P 500 with the 30 year rolling returns, inflation adjusted and dividends reinvested. Source[3]

[2]: http://imgur.com/Ja1xOcA [3]: http://redd.it/3fsdex

Thanks.