Or at least our investments are. I was doing a review last night and we just haven't had good returns, overall, since early 2015. I mean, we had some great individual months, but also some bad ones, and our accounts haven't gone up by much more than our contributions. We've actually split the difference a bit in that my retirement account is more do-it-ourselves and H's is more managed just to see if one would outperform the other, and really they're coming out close to even.
Fortunately we're doing well in savings and real estate is booming in our area so overall our picture has gotten better, but it just feels like investments aren't doing what we've hoped for (average of 7% return over the long term), overall.
Anyone else not making as much progress as they'd like?
Post by lolalolalola on May 2, 2016 12:00:38 GMT -5
I know this is terrible but we stopped investing late last year (other than company sponsored stuff). We have loads of cash sitting in our bank account. I think we are going to put it on our mortgage. Guaranteed rate of return? I'll take it.
Well, the market was pretty flat last year and the S&P is up 1.05% for this year so far so you are probably on track. 1.05% for 4 months is still much better than you are getting with cash savings though.
You need to look at things over the long-term. How have you done over 3 years? 5? 10? Also, there are tax advantages and deferrals to think about when investing via retirement vehicles.
I know this is terrible but we stopped investing late last year (other than company sponsored stuff). We have loads of cash sitting in our bank account. I think we are going to put it on our mortgage. Guaranteed rate of return? I'll take it.
Make sure you also do the calculations on the tax breaks you will be giving up from the mortgage, as well as missed tax breaks and incentives from doing any pre-tax or sheltered investing.
I agree that paying down the mortgage is better than hoarding cash at 0%, but you are also missing out on tremendous growth potential by not investing.
I know this is terrible but we stopped investing late last year (other than company sponsored stuff). We have loads of cash sitting in our bank account. I think we are going to put it on our mortgage. Guaranteed rate of return? I'll take it.
Make sure you also do the calculations on the tax breaks you will be giving up from the mortgage, as well as missed tax breaks and incentives from doing any pre-tax or sheltered investing.
I agree that paying down the mortgage is better than hoarding cash at 0%, but you are also missing out on tremendous growth potential by not investing.
Our mortgage is not deductible (Canada). Clearly investing when the market is down is smart - i did say "I know this is terrible" . The guaranteed return is appealing.
We are both in oil & gas and last month I made it through round 3 of lay-offs at my company so we were worried about unemployment. We are now deciding what to do with our excess cash.
Post by littlemisssunshine on May 2, 2016 16:15:50 GMT -5
We are at 1.3% with my H's 401k, 3.7% with mine, and 4.2% with our Vanguard mutual funds (typically they are 8%+). The stock market is stressful, but I just close my eyes and keep investing. I tell myself historically it's always worked out. Maybe split up the money? Put some in the mortgage and some in the market?
Post by explorer2001 on May 3, 2016 4:52:00 GMT -5
I just keep repeating "dollar cost averaging" and "if the market is down I'm buying on sale". Then I stick my head back in the sand and refuse to look at anything othere than the 13.6% of my cash comp that my employer puts in my 401(k) between match and profit sharing. That and the over 13% I'm putting away are the only things that makes me think I *might* be able to retire someday.
Or at least our investments are. I was doing a review last night and we just haven't had good returns, overall, since early 2015. I mean, we had some great individual months, but also some bad ones, and our accounts haven't gone up by much more than our contributions. We've actually split the difference a bit in that my retirement account is more do-it-ourselves and H's is more managed just to see if one would outperform the other, and really they're coming out close to even.
Fortunately we're doing well in savings and real estate is booming in our area so overall our picture has gotten better, but it just feels like investments aren't doing what we've hoped for (average of 7% return over the long term), overall.
I can't tell from your post, but are you actually looking at your long-term returns or just those in the last year or few? Because, obviously, apples and oranges Long-term is more like 20 or 30 years so I try really hard not to focus on down periods and keep in mind that there will very likely be strong periods ahead to average out my returns. This is why time is one of the biggest factors in investment success.
That said, yeah, it sucks not to see the numbers go up steadily!
I k ow you're right, and this post was about 2015 through this weekend so definitely not long term. It just seems that there have been a lot of "down" (not hugely up) years since we became adults and started investing.
Rationally, I know it will be fine. My refusal to look at our accounts when I know the markets are tumbling helps me not to run around screaming "the sky is falling". I only go back in and look when it's in recovery mode. With Mr. P's career in oil & gas, we are surrounded with enough depressed industry talk that I can't do crashing markets as well. Denial and keeping my eyes shut and forging ahead is part of my strategy.
We add money and say "whee, we aren't we getting great bargains".
I can't tell from your post, but are you actually looking at your long-term returns or just those in the last year or few? Because, obviously, apples and oranges Long-term is more like 20 or 30 years so I try really hard not to focus on down periods and keep in mind that there will very likely be strong periods ahead to average out my returns. This is why time is one of the biggest factors in investment success.
That said, yeah, it sucks not to see the numbers go up steadily!
I k ow you're right, and this post was about 2015 through this weekend so definitely not long term. It just seems that there have been a lot of "down" (not hugely up) years since we became adults and started investing.
Thanks for the pep talk, all!
Actually if you look since 2000 the market has done pretty well. There has been research that shows that the negative years hurt more mentally than the up years, which is probably part of why the last 16 months or so have stung so much.
I k ow you're right, and this post was about 2015 through this weekend so definitely not long term. It just seems that there have been a lot of "down" (not hugely up) years since we became adults and started investing.
Thanks for the pep talk, all!
Actually if you look since 2000 the market has done pretty well. There has been research that shows that the negative years hurt more mentally than the up years, which is probably part of why the last 16 months or so have stung so much.
So, being the nerd that I am, I put all of these years into Excel and figured out that if I started with $1000 at the beginning of 2000 and didn't invest anything else, I'd end up with $1878 at the end of 2015. That sounds pretty good, until you get to the fact that that's only about a 4% rate of return, so over 16 years still lower than historical averages. This actually makes me feel less bad about how my individual investments are doing, though!
The augmented table (note years flipped from early to late) looks like this:
I think what I really needed was commiseration - to know that I'm not the only one who gets down about this sometimes!
Logic and emotion are two different things.
For sure! I've been having continuous conversations with DH for the past month about how he feels like we aren't doing enough to ensure good return for our investments. He's honestly driving me insane! For whatever reason, he's decided to start watching the market multiple times a day for the past several weeks which is insane.
I'm in the camp of, we still have 16 years before we will even be eligible to make withdraws and there will be multiple ups and downs in the meantime and it'll all average out in the end. To me, the important thing is that we are saving.
But, I get it that it sucks to not see it grow faster.
aurora, sure, but that assumes you only invested $1,000 once over those 16 years. I know I began investing tiny amounts right out of school and increased my annual investments over time. This also assumes that you started investing in 2000, which was one of the shittiest years in recent memory to start investing and you STILL made 4%.
It's tough to see small gains, but we factor a 5% growth to keep our expectations conservative. It's hard to see our retirement accounts growing so slowly, but it does make for some good buying opportunities in our "fun" account.