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re: Is Modern Portfolio Theory Dead?

Posted on 3/2/24 at 4:56 pm to
Posted by slackster
Houston
Member since Mar 2009
85489 posts
Posted on 3/2/24 at 4:56 pm to
quote:

Sure if you invested a lump sum 50 years. If you compare the returns of the the last 5, 10, 20 years it would lose to S&P 500


From point A to point B, sure, but that’s not how life often works. I think that’s often overlooked in these threads. Average and median S&P 500 one year returns smoke pretty much every traditional asset, but it doesn’t mean it’s a good idea for money you need in 12 months.
Posted by SaintsTiger
1,000,000 Posts
Member since Oct 2014
1129 posts
Posted on 3/2/24 at 5:02 pm to
You obviously didn’t watch the 20 minute video. Also the S&P 500 lost 1% from 2000 to 2010.

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This post was edited on 3/2/24 at 5:06 pm
Posted by gpburdell
ATL
Member since Jun 2015
1425 posts
Posted on 3/3/24 at 1:24 am to
quote:


From point A to point B, sure, but that’s not how life often works. I think that’s often overlooked in these threads. Average and median S&P 500 one year returns smoke pretty much every traditional asset, but it doesn’t mean it’s a good idea for money you need in 12 months.


I never said that's realistic but that's what historical returns are based on. Also I was just countering the idea that investing in that specific allocation was better than the S&P 500 today because it outperformed for a past 50 year period.

That allocation hasn't outperformed the S&P 500 for the past 5, 10 year and 20 years going back from today.


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