Pre-covid it appeared to me that 10% was a reasonable benchmark to measure my own performance against. Post-covid however feels like a different market.
I had recommended soxx as a potential investment to friends in the 2021-2023 time periods and a lot of them are up 2-300%. My own portfolio is up similarly and I wouldn't have considered it to be overly aggressive (definitely aggressive but not fully porting into options or meme rally aggressive).
Is my perspective skewed or is this market rally unlike others we've seen in the past? If it is something new, does anyone want to hazard guesses on relative horizons until markets return to less volatile returns (not asking people to try and time the top I'm curious about broader time frames) if they ever do?
I would love to soundboard off of other people's perspectives.
Are the days of looking at roughly 10% as a reasonable benchmark over or is my perspective skewed?
byu/funfactsarecool instocks
Posted by funfactsarecool
8 Comments
“I bought semis before the biggest semi rush the world has ever seen. Is this normal”
I’ve been aiming for 40% since 2020. I’ve beat it each year except 2022 (22%). I think 10% is extremely conservative.
This definitely won’t continue forever, but I don’t think it will crash either. Markets are getting smarter, more accessible, and more forward thinking than ever. The truth is there’s really no better place for worldwide capital than tech giants and those on the leading edge of space and AI, so while it won’t keep climbing at 10% per week obviously, I highly doubt a large crash is imminent just because it has shot up.
I’m not going to bet on a timeline, but as some point it will be “enough” for those looking to buy in, and we will return to our normal gains from DCAing funds and retirement deposits
I think there will be a period one day where stocks struggle & we’ll question of 10% is too optimistic.
You try to buy great business at rational prices & hope time is on your side.
Are you talking about 10% per day?
You are looking at the returns of the rich, as am I. Do you want risk and possible big returns, or small risk and almost guaranteed returns?
The entire world is different after Covid. Fundamentally speaking
Dimson, Marsh, and someone else (sorry third author who I can’t remember) used 120 years historical data and concluded that the average equity risk premium is 5%.
So 5% over the cash rate is the generally agreed upon benchmark for equity investment.
Of course if you only invest in US stocks etc you could just use a local index as benchmark eg s and p 500