this post was submitted on 17 Jun 2024
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No Stupid Questions

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Is there a hard threshold? Do high risk investments such as penny stocks qualify as gambling? Do low risk investments? Annuities? Bonds? CDs?

This comment got me wondering.

Is it more to do with the venue? Stock markets and real estate vs casinos and the lottery?

Were the MIT Blackjack Team gambling or investing?

Or Jerry and Marge Selbee?

Is this just another semantic hotdogs are sandwiches discussion or is there an agreed threshold?

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[–] Steve@communick.news 6 points 5 months ago* (last edited 5 months ago) (1 children)

"All traded stocks" isn't "Any traded stock".
It's all of them collectively.

Nikkei from the 1990's - that's an entire index that was flat for 30 years.

The 1990's was only 10 years. And that's also just Japan, which again isn't "All Traded Stocks".

[–] Blue_Morpho@lemmy.world 1 points 5 months ago* (last edited 5 months ago) (2 children)

If you had invested in the stock market (all stocks) in 1961, you would have lost 2% a year, every year for 20 years.

So $10000 in the market in 1961 was worth $6600 by 1981.

https://archive.nytimes.com/www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html

[–] BombOmOm@lemmy.world 4 points 5 months ago* (last edited 5 months ago)

https://archive.nytimes.com/www.nytimes.com/interactive/2011/01/02/business/20110102-metrics-graphic.html

On that 20-year diagonal, there are only eight of the seventy squares that didn't have returns higher than inflation. And in every one of those few cases, holding just a few years longer made the investment outpace inflation. When even black swan events don't break the strategy, this simply is more confirmation that investing in an index fund for long periods of time is a proven strategy.

Note that light-red boxes are investments that outperformed inflation. No clue why they would color making more money than inflation red...

[–] Steve@communick.news 1 points 5 months ago* (last edited 5 months ago) (1 children)
[–] Blue_Morpho@lemmy.world 4 points 5 months ago* (last edited 5 months ago) (1 children)

1961 to 1988. Inflation adjusted, it was 749 in 1961 and 723 in 1988.

27 years.

https://www.macrotrends.net/2324/sp-500-historical-chart-data

[–] Steve@communick.news 3 points 5 months ago (1 children)

My challenge didn't include inflation. Though I did mention it prior to that, so it's an easy assumption to make.

That's also just the S&P500, which isn't even all US stocks, let alone international. But I did previously mention it as the minimum of "broad". I'll accept that as well.

So with some asterics, I congratulate you.

[–] Blue_Morpho@lemmy.world 3 points 5 months ago

My challenge didn't include inflation.

That always must be assumed. Otherwise you could claim Zimbabwe had the best return on investment over the past 20 years.