SPY - IVV: Long-Term Passive Investing May Not Be The Way To Go

2024-05-28 15:19:14 ET

Summary

• Investing $300/month at a 12% annual rate of return produces $3.5M in 40Y. Historically, the S&P 500 returned around 12%/year.
• However, the assumption of a 12% annual rate of return for the S&P 500 may not hold over the next 20-40 years due to geopolitical factors as deglobalization unfolds.
• Tactical investing, such as liquidating stock holdings before a recession, may be a viable alternative to long-term passive investing, especially for those nearing retirement.

Discipline and patience

A capitalist society potentially allows everyone to retire as a millionaire. The math behind investing is very simple, but the actual process of retirement investing requires discipline and patience....

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