This is just a hypothetical question, but let's say you could have a guaranteed annual yield for the next, let's say, 20 years. How high would it have to be for you to stop investing in individual stocks? A reasonable answer would probably be somewhere around 10%. But some of you are better than this, and then there is also the fun factor in stock picking, analysing and, well, discussing it with friends and over the internet. For me, it would probably have to be a bit higher, maybe around 14% to give up all this.
Edit: I've just realized that it's probably very dependent on the person's net worth. I don't have a huge portfolio so that's why I wanted to be more aggressive. Having large portfolio, I would be certainly satisfied with much smaller %.
Hypothetical: At what guaranteed annual yield would you stop picking individual stocks?
byu/airenek instocks
Posted by airenek
5 Comments
Obviously subjective, but for me it would be +12%, on top of inflation.
So Let’s say I have $100, and inflation is 3%, I’d be satisfied with 100 x 1.03 x 1.12 = 115.36, so a 15.36% guaranteed annual yield.
Dear god. If this endless bull run ever truly ends and produces a proper 3-4 year bear market, it’s going to sting for a lot of young investors
35%, don’t earn much so investing is my sole way for becoming wealthy, also don’t want to work full time beyond 40
A guaranteed 10% after inflation for 20 years is basically financial cheat mode.
Most stock pickers would underperform that after taxes, stress and bad decisions anyway.
I start to worry that the peak is near when I come across posts like this.
A guaranteed yield of 10-14% is not something even a con man would promise.
The only practically risk-free return is from government bonds, which currently offer a 4% yield.