Dow plunges 1000 points

Re:Dow plunges 1000 points by mcguire on Monday February 05, 2018 @05:56PM (#16313016)

Long term returns over the last century have been about 3%, after taxes, inflation, etc. If have to do some digging to find the chart.

"Long term" is longer than 20 years.

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Re:Dow plunges 1000 points by prepend on Monday February 05, 2018 @06:21PM (#16313172)

Cool. I’d like to see that chart because there will need to be some interesting assumptions about taxes.

The 20th century was particularly good and I think the average return was closer to 6 than 3.

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Re:Dow plunges 1000 points by mcguire on Monday February 05, 2018 @10:01PM (#16314130)

The assumptions should be documented there.

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Re:Dow plunges 1000 points by prepend on Tuesday February 06, 2018 @08:46AM (#16316149)

Thanks this is really helpful. 4% for the 20th century is definitely closer to 3 than 6.

However, the assumptions have only 80% in capital gains while this should be much higher for long term investors.

If you’re investing in a 401k then you add about 1-3% because you won’t be taxed each year and those gains are compounded.

And it’s assuming 1% admin fees from 2000+. This is way too high and is closer to .1% starting in the 80s with vanguard index funds.

So if you invest in tax deferred index funds you are looking at 5-6% after taxes and inflation.

But I like the way this matrix displays info and I want to find a version with assumptions for efficient 401k investors.

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