milkmaan
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Location: las vegas
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| MILLION DOLLA QUESTION? |
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well maybe it is or isn't, hi all im new to this forum, like the rest of you paatna's i want to make my life a little easier... im 33 im getting a large sum of money from getting run over back in 03, 6yrs later and finally getting paid... anyway here's the my question: if you had 5 to 10k + or - to invest and sit on for 5 to 10yrs or longer what would yield the best return on your money? something that any money earned is rolled back into itself and just keeps growing? im not the birghtest star in the sky but i do shine from time to time.. all advise and thougths are welcomed? thanks
the milkmaan
las vegas,NV
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Wed Dec 16, 2009 6:52 pm |
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oldguy
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quote:
if you had 5 to 10k + or - to invest and sit on for 5 to 10yrs or longer what would yield the best return on your money? something that any money earned is rolled back into itself and just keeps growing?
The Ultra Spyders is a leveraged version of the SP500 Index, the leverage is 2 to 1. So if the SP500 goes up 10%, the Ultra goes up 20%. The ticker symbol is SSO.
Historically, over 30 years, the SP500 has returned about 12%/yr. The SSO would return 24%/yr minus the cost of borrowed money to provide the leverage, ie maybe an 18%/yr return. Your idea of longterm is way short of the usual definition - most investers think of long term as over 20 yrs, 30 is better. The market needs time to statistically average the 'up' years with the 'down' years to provide a predictable return.
If it provided the 18%/yr return, your $10,000 could be $52,000 in 10 yrs. For 20 yrs it could be $275,000. In 30 yrs it could be $1,400,000. As you can see, 'time' is the biggest factor, it takes patience to become wealthy.
And, since return is directly proportional to risk, it is quite a bit safer to use a 12% investment (rather than an 18%) and simply wait a few extra years. Your probability of a successful outcome is way higher.
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Thu Dec 17, 2009 3:10 am |
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coaster
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Milkmaan, I think 10 years (or longer, as oldguy says) is a better time horizon for what you want to do. If there's any chance you'll need the money in five years or less, you're better off just parking it in CDs or a money-market fund. The risk of loss decreases with an increase in your time horizon, and visa versa.
~Tim~
Eye Candy : Why Whimsy
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Thu Dec 17, 2009 4:19 am |
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milkmaan
New Member
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Joined: 16 Dec 2009
Location: las vegas
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quote:
Originally posted by oldguy
quote:
if you had 5 to 10k + or - to invest and sit on for 5 to 10yrs or longer what would yield the best return on your money? something that any money earned is rolled back into itself and just keeps growing?
The Ultra Spyders is a leveraged version of the SP500 Index, the leverage is 2 to 1. So if the SP500 goes up 10%, the Ultra goes up 20%. The ticker symbol is SSO.
Historically, over 30 years, the SP500 has returned about 12%/yr. The SSO would return 24%/yr minus the cost of borrowed money to provide the leverage, ie maybe an 18%/yr return. Your idea of longterm is way short of the usual definition - most investers think of long term as over 20 yrs, 30 is better. The market needs time to statistically average the 'up' years with the 'down' years to provide a predictable return.
If it provided the 18%/yr return, your $10,000 could be $52,000 in 10 yrs. For 20 yrs it could be $275,000. In 30 yrs it could be $1,400,000. As you can see, 'time' is the biggest factor, it takes patience to become wealthy.
And, since return is directly proportional to risk, it is quite a bit safer to use a 12% investment (rather than an 18%) and simply wait a few extra years. Your probability of a successful outcome is way higher.
ok can you put that into lammin's terms? just a generalized break down would be good? i put it into sp500 and then i can let it do the rest or do i have to baby sit it? let me know? i will google sp500 and see what i can find? thanks again for your time and patience..
PS i googled it and looks as though i would have to do a lil baby sitting ( ok ) so is that a variety of stocks my money would cover or do i get to pick n choose what stocks i want? for sure no high risk options? thanks again
aaron
aka the milkmaan
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Thu Dec 17, 2009 5:35 pm |
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Raptor
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The next 12 months have plenty of uncertainties that economist are split on which way the market is heading. To help offset the risk, use dollar cost averaging. Set up a mutual fund account and put $500 per month into the fund. If the market rises you didn't fully miss out on the rally, but if the market falls, not all your money was at risk. Thing should settle down in 2011, but 2010 will remain very volatile, be cautious on any big moves over the next year, take it slow and easy.
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Thu Dec 17, 2009 5:57 pm |
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iwillguide
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| hi |
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i advise you to invest in mutual funds to get profits with less risking
payday loan sites | real payday loans
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Wed Dec 23, 2009 10:32 am |
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oldguy
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quote:
PS i googled it and looks as though i would have to do a lil baby sitting ( ok ) so is that a variety of stocks my money would cover or do i get to pick n choose what stocks i want? for sure no high risk options? thanks again
No, no baby sitting needed. You could buy it and let it sit unwatched for 40 years if you want to - actually that is what worked best over the past 40-yrs, people who did that are wealthy. Historically, $10k in the SP500 Index for 40 yrs would be $930,000.
Both the Spiders (SPY) and the Ultra Spiders (SSO) are funds of the SP500 stocks, the 500 major US corporations. SPY tracks the SP500 Index exactly and has a moderate risk. SSO uses borrowed money to double your investment, so it goes up or down at about twice the rate of the SP500 Index and it has a high risk. So if you don't want the high risk option, you would want SPY.
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Wed Dec 23, 2009 4:20 pm |
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coaster
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I'd suggest SPY for someone who's not an experienced investor. Somehow, the long-term numbers lose their impact in the midst of the short-term 2X volatility, and they usually sell. Somehow? Wrong word. I know how: it's emotion that is a stronger force than knowledge. It's kind of a human weakness.
~Tim~
Eye Candy : Why Whimsy
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Thu Dec 24, 2009 6:36 am |
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