I've always been a believer of "set it and forget it". Invest everything in S&P500 or Total Market index funds.
But I can't stop thinking about the idea of the total stock market growing forever. Is it realistic to think that the economy will keep growing forever?
Anyone else has thoughts on this?
Posted by iamdebbar
4 Comments
Yes.
The stock market can go up forever in nominal terms as long as we’re printing money – underlying question is will companies actually continue to become more productive or more profitable in real terms. If you priced it in euros, stock market growth hasn’t been that great last few years.
VTSAX and relax.
The history of the world is innovation, greater productivity, more economical use of resources, etc. Over a lifetime, the odds are very good the total market of the world will go up. However, over a short time period or in one country or one industry, other factors (politics, war, famine, changing trends, disease, etc) will negatively affect an investment. There’s three questions you need to answer for yourself: 1) how soon do you need your investment return, 2) what is your emotional and physical risk tolerance, and 3) will your investment diversification sustain you if you fail to correctly predict the future of a company, industry, or country?