I'm skeptical that anyone is going to achieve fifteen percent return on investment over a long period of time, and I don't think that aiming for twenty-five percent is a good idea.
I haven't looked at the numbers in a while, but the number I remember was that the market traditionally grew at a rate of about ten percent. To the extent that the market may have grown faster in recent years, I have to wonder whether that growth is just a response to inflation. If the government pumps more currency into circulation, that currency will inflate everything, include the stock market.
I believe that getting fifteen percent returns will require having a very high risk portfolio. For people who are good talkers and always able to land on their feet and get others to help them, maybe this approach isn't too dangerous. Even in a crash, they will find ways for their needs to be met. For those of us who are not fancy talkers and able to influence people through slick words, crashes are more dangerous. People might feel sympathy for us, but when they have to decide who's going to be left to die, they pick us.
As I've said in other replies, gold doesn't "do" anything. Gold can't produce more gold from "seed" in the way that a tree can produce seeds to produce more trees that will produce more fruit. Gold can't plow a field to grow more crops. Gold is not a good metal for making hunting implements to harvest meat from nature. Gold isn't a particularly good metal for any implement of animal husbandry, so gold isn't a big part of raising herds for meat, eggs, or milk. Gold doesn't have that many uses in manufacturing industrial items that are useful for production or recreation. Gold's value is only from the fact that people have wanted gold since the first people found the first pieces of gold.
I remember that some political commentator years ago was interviewing her father around Father's Day. He liked investing in gold. As an example of gold's sustaining value, he said that throughout modern history, an ounce of gold would buy a really good men's suit. He said that no matter what prices were at any given time, the cost of a really good suit was about the same as that of an ounce of gold. Maybe we've finally reached a point where suit-making is cheap enough that plenty of good suits cost much less than an ounce of gold. I think this guy was talking about a fine, tailored suit. To the extent that he was right, the value of gold was not appreciating. The ounce of gold today would buy a fine, tailored suit today, but when that suite was gone, it was gone. Holding onto that ounce of gold would still only buy another fine, tailored suit in the future. An appreciating investment should be worth more in the future.
I agree that every good portfolio should include some gold. Gold is a good hedge against inflation. When other things fail, gold won't fail as quickly. If the rest of the market tumbles, gold won't tumble as quickly. None of that changes the fact that gold isn't producing anything else so that it will multiply in value.
I would urge people to invest in a number of things and not try to meet a specific return. Some things will produce huge returns. Others are just safety nets against market collapse. A four percent dividend return that is fairly stable is better in five years than a stock that is growing twenty percent per year and then crashes to zero if someone doesn't get out of that stock in time.
You've got a good awareness. The NASDAQ has grown at 12% per year for the past twenty years. That's "average" so if you were completely diversified (in the NASDAQ) that's the return you could get. My suggestion is to aim to do better than that by considering the future and what will do better than average in the future.
Yes, a big part of the returns are due to inflation. That's why it's critical to factor in the 5.7% loss of value in the US Dollar for the past forty years! If you aren't "making" more than 5.7% then you are actually losing value (although if you keep contributing then your total savings might go up).
It sounds like you are the polar opposite of me for "risk". For the past nineteen years my rate of return has been over 25%, thus I know it's possible to far exceed 15%.
We can take examples of others:
Warren Buffett - 1965 to 2024 - 20% return
Jim Simons - 1988-2018 - 39% (this is something of a special case and wouldn't apply to typical investors)
George Soros - 1970-2000 - 30%
Keep in mind, those are the exceptions! The extremely rare, most successful investments. That gives an idea of something to aim for, not something to expect. My own performance fits into that. I don't know if I can duplicate that success for the next twenty years.
Correct, gold doesn't create wealth, it maintains wealth. For me, gold and silver are the "safety net". If the stock market completely crashes (which it has *never* done) and goes to zero with no recovery, then the metals are the reserve savings so I'm not left with "nothing".
I'm skeptical that anyone is going to achieve fifteen percent return on investment over a long period of time, and I don't think that aiming for twenty-five percent is a good idea.
I haven't looked at the numbers in a while, but the number I remember was that the market traditionally grew at a rate of about ten percent. To the extent that the market may have grown faster in recent years, I have to wonder whether that growth is just a response to inflation. If the government pumps more currency into circulation, that currency will inflate everything, include the stock market.
I believe that getting fifteen percent returns will require having a very high risk portfolio. For people who are good talkers and always able to land on their feet and get others to help them, maybe this approach isn't too dangerous. Even in a crash, they will find ways for their needs to be met. For those of us who are not fancy talkers and able to influence people through slick words, crashes are more dangerous. People might feel sympathy for us, but when they have to decide who's going to be left to die, they pick us.
As I've said in other replies, gold doesn't "do" anything. Gold can't produce more gold from "seed" in the way that a tree can produce seeds to produce more trees that will produce more fruit. Gold can't plow a field to grow more crops. Gold is not a good metal for making hunting implements to harvest meat from nature. Gold isn't a particularly good metal for any implement of animal husbandry, so gold isn't a big part of raising herds for meat, eggs, or milk. Gold doesn't have that many uses in manufacturing industrial items that are useful for production or recreation. Gold's value is only from the fact that people have wanted gold since the first people found the first pieces of gold.
I remember that some political commentator years ago was interviewing her father around Father's Day. He liked investing in gold. As an example of gold's sustaining value, he said that throughout modern history, an ounce of gold would buy a really good men's suit. He said that no matter what prices were at any given time, the cost of a really good suit was about the same as that of an ounce of gold. Maybe we've finally reached a point where suit-making is cheap enough that plenty of good suits cost much less than an ounce of gold. I think this guy was talking about a fine, tailored suit. To the extent that he was right, the value of gold was not appreciating. The ounce of gold today would buy a fine, tailored suit today, but when that suite was gone, it was gone. Holding onto that ounce of gold would still only buy another fine, tailored suit in the future. An appreciating investment should be worth more in the future.
I agree that every good portfolio should include some gold. Gold is a good hedge against inflation. When other things fail, gold won't fail as quickly. If the rest of the market tumbles, gold won't tumble as quickly. None of that changes the fact that gold isn't producing anything else so that it will multiply in value.
I would urge people to invest in a number of things and not try to meet a specific return. Some things will produce huge returns. Others are just safety nets against market collapse. A four percent dividend return that is fairly stable is better in five years than a stock that is growing twenty percent per year and then crashes to zero if someone doesn't get out of that stock in time.
Skepticism is of course very good!
You've got a good awareness. The NASDAQ has grown at 12% per year for the past twenty years. That's "average" so if you were completely diversified (in the NASDAQ) that's the return you could get. My suggestion is to aim to do better than that by considering the future and what will do better than average in the future.
Yes, a big part of the returns are due to inflation. That's why it's critical to factor in the 5.7% loss of value in the US Dollar for the past forty years! If you aren't "making" more than 5.7% then you are actually losing value (although if you keep contributing then your total savings might go up).
It sounds like you are the polar opposite of me for "risk". For the past nineteen years my rate of return has been over 25%, thus I know it's possible to far exceed 15%.
We can take examples of others:
Warren Buffett - 1965 to 2024 - 20% return
Jim Simons - 1988-2018 - 39% (this is something of a special case and wouldn't apply to typical investors)
George Soros - 1970-2000 - 30%
Keep in mind, those are the exceptions! The extremely rare, most successful investments. That gives an idea of something to aim for, not something to expect. My own performance fits into that. I don't know if I can duplicate that success for the next twenty years.
Correct, gold doesn't create wealth, it maintains wealth. For me, gold and silver are the "safety net". If the stock market completely crashes (which it has *never* done) and goes to zero with no recovery, then the metals are the reserve savings so I'm not left with "nothing".