[HN Gopher] Show HN: Inflation-adjusted stock charts - Total Rea...
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Show HN: Inflation-adjusted stock charts - Total Real Returns
Here's a little side project I've been working on:
https://totalrealreturns.com/ The Total Real Returns chart
demonstrates the preservation or growth of real wealth more clearly
than conventional (nominal-dollar, price-only) stock charts,
because: (1) we include the effects of inflation-diminished
purchasing power, and (2) we include the effects of reinvesting
dividends from the initial investment. I found it harder to
explain the y-axis in words than it was to do the math, so please
let me know if you think the "baguettes" explanation on the
homepage helps. I was up until 4am ET finishing some features on
this, and then at 8:30am ET the BLS released the new CPI numbers
through their API: https://download.bls.gov/pub/time.series/cu/ and
I was able to manually re-run my daily cronjob with the new
numbers, so it's up to date! If you catch any bugs, please let me
know via the "Report a bug" link in the footer of every page. Some
FAANG examples: https://totalrealreturns.com/s/META
https://totalrealreturns.com/s/GOOGL
https://totalrealreturns.com/s/AMZN
https://totalrealreturns.com/s/AAPL
https://totalrealreturns.com/s/NFLX Comparing three Vanguard
treasury funds, showing vividly the impact of bond duration (short-
term, intermediate-term, long-term) on both risk and reward:
https://totalrealreturns.com/s/VFISX,VFITX,VUSTX
Author : compumike
Score : 347 points
Date : 2022-07-13 12:55 UTC (10 hours ago)
(HTM) web link (totalrealreturns.com)
(TXT) w3m dump (totalrealreturns.com)
| artursapek wrote:
| What a dope tool, thanks for building it! I love clean, simple
| dataviz websites like this.
| fundamental wrote:
| If the goal is to demonstrate relative performance over time,
| wouldn't it be useful to use a normalization such that all lines
| either start at the same point (e.g. simulating investing X
| amount) or ending at the same point (showing requirement to get
| to X final amount)?
| georgeecollins wrote:
| Isn't the comparison of relative performance in the trend line?
| That's a year over year % change for every asset, so it doesn't
| matter what value you start with.
| compumike wrote:
| I think that's a reasonable idea and I may try including that
| option in the future. Right now, the start point is quite
| arbitrary: it's the first date where we have data for all the
| symbols requested. And date ranges dramatically affect any sort
| of relative performance comparison. So in the current code I
| decided to just normalize to today's nominal-dollar value so
| that the end values are relatable.
|
| What would the ideal UX be on this?
| ricardobayes wrote:
| Start every asset at 100k? I might be oversimplifying
| something, but it would really help to see how each asset
| performed over time.
| fundamental wrote:
| If you want to have ragged starting information displaying
| pricing information for the various symbols in the range
| they're defined, I'd assume it's much more common that
| there's different start dates, but they're all defined for
| today. So, you could have a single checkbox to normalize
| based upon equal value at today's value and I'd default to
| having that on. As your baguette argument about the absolute
| values not having huge significance still applies it seems
| like it would work with no other modifications (i.e. it
| doesn't matter that it could require fractional shares and
| the like).
| mediaman wrote:
| Just index it all to the same starting value, which will have
| the same effect. I don't think this works for the drawdown
| chart but works for the total return chart.
|
| Usually in economic and financial reporting you show multiple
| return series by saying, for example, 1989 = 100 and then
| showing the total return from there for multiple series in
| the same chart.
| kaimaoi wrote:
| Growth of $10K (growth of a hypothetical $10,000 investment)
| is a chart that is commonly-used to illustrate this. Your
| chart would then have VFINX, VBMFX, and USDOLLAR start with
| $10,000 on 1987-08-03 and go from there.
| olalonde wrote:
| Suggestion: it would be nice to have a chart like the first one
| but where relative changes (%) in value are plotted... That would
| make it easier to use a linear Y axis instead of a logarithmic
| one (which can be hard to interpret).
| noja wrote:
| Which inflation? If I am earning a thousand bucks a month and all
| my money goes on fixed costs, and those double, my inflation is
| 100%.
| zie wrote:
| Clearly they are talking about CPI-U, the common US definition
| of inflation.
|
| Everyone has their own personal inflation rate, mine in 2021
| was 1%. We will see how 2022 turns out, but I'm betting it will
| go up for me.
| e63f67dd-065b wrote:
| Huh, so portfoliovisualizer but with slightly more convenient
| shortcuts built in. Looks neat, but way less powerful than just
| using portfolio visualiser. I've always wondered where the data
| is sourced; so the exchanges publish this data for all to use, or
| does everybody have to scrape them together? Obviously if you pay
| them you'll get real-time data, but all these free tools do leave
| me wondering.
| compumike wrote:
| I'm paying for https://eodhistoricaldata.com/ API access.
| workah0lic wrote:
| I used to calculate this manually whenever I thought about the
| reality, and whenever wondering if I can retire. This is really
| cool. One comment though is the mass of company names at the
| bottom is illegible so I would think a search box + top 20 list
| would be better
| ezekg wrote:
| > One comment though is the mass of company names at the bottom
| is illegible so I would think a search box + top 20 list would
| be better
|
| Probably for SEO. :)
| compumike wrote:
| I'd been planning to add an autocomplete symbol search box. I
| ran out of time because I knew the new CPI data was being
| released this morning. I wanted to launch the site today, so
| last night at 3am ET I just added a big list of symbols. But
| yeah might be good for SEO too :)
| boringg wrote:
| Really illustrates how well dollar holds to inflation.
| nope96 wrote:
| Perhaps Gold should be on the front page, as it is always
| mentioned as a supposed inflation hedge.
|
| also https://www.portfoliovisualizer.com/backtest-asset-class-
| all... has stock data back to 1971, it would be nice to go back
| that far.
| throwaway_4ever wrote:
| Here's an example link:
| https://www.portfoliovisualizer.com/backtest-asset-class-all...
|
| If you scroll down, under the "Portfolio Growth" chart, you can
| check "inflation adjusted" to get a common start, something TFA
| doesn't have.
| odyssey7 wrote:
| While it's not a security and summarizing its returns is more
| complex, it would also be interesting to see "home ownership."
| ianai wrote:
| Wondering whether the Case-Shiller index would be good for
| this. The problem with RE is broad heterogeneity.
| Drblessing wrote:
| I've often read Stocks average +10%/year, is this true when
| factoring in taxes + inflation?
|
| Wondering if other investments that appear less attractive on
| paper are actually better than traditional equities.
| fleischhauf wrote:
| aren't they all subject to inflation?
| pedrosorio wrote:
| Having all lines normalized so they start from a common point at
| x = 0 would be helpful. That would allow reading the total
| returns as percentage of the initial (1987) investment and
| compare them.
|
| Similarly in the drawdown chart, if it starts at 1987, it makes
| no sense to start the dollar at -81%. If I am looking at a chart
| from 1987 to 2022, I want to see how the dollar did compared to
| other assets in that time period.
| ricardobayes wrote:
| I had the same thought. Having each assets start from the same
| value (eg. 100k USD) would really help.
| nonethewiser wrote:
| Is that even possible? Wouldn't that suggest something that is
| not true?
| epgui wrote:
| How is it not true? All these numbers are relative, and you
| can make the choice of comparing them to whatever reference
| point you want.
| rm999 wrote:
| The y-axis has actual meaning: it tells you the purchasing
| power of a public stock, which will never be 0.
|
| What you could do is normalize it by the value of the stock
| at the start of the chart, which would make the charts
| start at 1. On a log plot this is the equivalent of
| dividing all the values by the starting value, which moves
| the lines up/down but does not change their shape. This
| _could_ make it easier to compare the lines, but in doing
| so, you throw out information (the real value of the y
| axis).
| pedrosorio wrote:
| > The y-axis has actual meaning: it tells you the
| purchasing power of a public stock, which will never be
| 0.
|
| If we are trying to visualize the total return of a given
| asset since 1987, how is the price of a single stock (an
| arbitrary unit) in 1987 or any time since, relevant data?
|
| The ROI expressed as a percentage on the y axis (with 0%
| at the beginning of the period) would be a much better
| visualization of the relative returns among asset classes
| throughout the period.
|
| Currently I get USD < VBMXFX < VFINX at the beginning of
| the chart, for reasons that have nothing to do with the
| total return since 1987.
|
| The drawdown chart is even more confusing with the USD
| starting at -81%. If we were plotting a chart of drawdown
| of multiple currencies, the older ones would start lower
| (since they've had more time to be affected by inflation)
| which only makes it hard to visualize the answer to the
| question "how did they do since 1987".
| kurthr wrote:
| You don't really need that on a logarithmic plot since the
| ratio of stock prices is always a constant vertical separation.
| It is very necessary on linear pricing plots.
| pedrosorio wrote:
| Can you tell at a glance which asset had a better return
| since the start date until March of 2009? A plot of total ROI
| (with all assets starting at y = 0) would make that obvious
| (for any given end date).
|
| As far as I can tell, the different intercepts just add noise
| (price of a single stock) that is not helpful to visualize
| what the plot is supposed to be showing (total returns).
| rrevi wrote:
| Thanks for sharing compumike! Very cool!!
|
| If you don't mind me asking, why did you choose the Crystal
| programming language for this project?
| compumike wrote:
| Crystal https://crystal-lang.org/ is beautiful, highly
| performant, concise, powerful, well documented. It has a solid
| standard library and plenty of "shards" (packages) too. It's
| really the elegance of writing it that I appreciate the most --
| perhaps even more than I get that elegant feeling from Ruby.
| The code for the standard library is highly readable and well
| documented, which is awesome.
|
| In working on this project, I discovered two "superpowers" of
| Crystal:
|
| The first was macros https://crystal-
| lang.org/reference/1.5/syntax_and_semantics/... which I used
| sparingly, but to great effect, when an ordinary method call
| wouldn't do.
|
| The second was monkeypatching: specifically, it's super easy to
| reopen existing standard library classes and add a field I
| need, for example: # BEGIN MONKEYPATCH
| class HTTP::Server::Context property
| response_body_cache_key : String? = nil end #
| END MONKEYPATCH
|
| This adds a new field the standard library
| HTTP::Server::Context https://github.com/crystal-
| lang/crystal/blob/1.5.0/src/http/... / https://crystal-
| lang.org/api/1.5.0/HTTP/Server/Context.html so I can specify a
| cache key near the beginning of a request handler, and later my
| response middleware picks it up to store the response body.
| mNovak wrote:
| At a glance this seems to show that bonds are in a historic
| drawdown. Can anyone ELI5 the implications of that?
| MacsHeadroom wrote:
| As with any unprecedented economic phenomena, the full
| implications are unknown.
|
| For one thing, people retiring right now, who followed the best
| practice of shifting their portfolio towards bonds, are seeing
| millions wiped out from their individual retirement accounts.
|
| For a huge amount of would-be retirees, this is the difference
| between being able to afford retirement and being forced to
| remain in the workforce in the last years of their lives.
| jl2718 wrote:
| This period has been very special because of the 401k, which is
| itself part of the growth story of the corporate legal structure.
| I think this is coming to an end. Corporate boards and officers
| no longer represent the best long-term interests of the companies
| and shareholders they represent. It's also a very precarious
| legal status as an arbitrary judicial ruling can make or break a
| company. Finally, and perhaps most importantly, the corporate
| bubble is based on arbitrary tax codes that both advantage
| corporations and push worker savings into the stock market.
|
| Even if these conditions continue unabated, the cash flows from
| working class into the stock market will eventually hit
| equilibrium with capital extraction from the owner class. If the
| extractions return to the same markets, then things stay in
| equilibrium. They won't, however, because the tax advantaged
| assets are different for them. They may seek hyper-volatility, or
| government bond shelters, but will generally avoid the assets on
| the working class tax treadmill.
|
| There are fundamentals to financial assets that have nothing to
| do with "number go up", and these will ultimately dictate
| reality, with the caveat that "the markets will remain irrational
| longer than you will remain solvent". Rationals get wrecked too,
| except every once in a while when one gets lucky on their timing
| and makes so much money that they become a hero and we make
| movies about them. We cheer because it gives us hope that our
| intuition will serve us too. Unlikely.
|
| This is all to say that such charts are using an inductive
| hypothesis to predict an inherently anti-inductive phenomenon.
| People tithe and sacrifice to their church for a promise of
| rewards in the afterlife. The stonk religion is the same; well
| worth the price for your peace of mind. True or not, you'd be a
| mess without it.
| mechanical_bear wrote:
| I liked your explanation but you undermine your write up by
| discussing something you clearly have no business discussing:
|
| >> People tithe and sacrifice to their church for a promise of
| rewards in the afterlife.
|
| This is a fundamental misunderstanding of tithing and I'm not
| going to get into that at the moment, but it makes me consider
| if you are discussing other things in your write up that you
| don't have experience with as well.
| danans wrote:
| > This is a fundamental misunderstanding of tithing and I'm
| not going to get into that at the moment,
|
| To the extent that tithing (or a non Christian equivalent)
| supports a religious institution's facilities and payroll and
| programs to be help less well off members of the religious
| group, it's a bit socialistic, with the huge caveat that - by
| definition - it is not universal, since to receive such
| benefits you must usually be an adherent or serious prospect
| of conversion to the religion.
|
| I'm sure most people realize that their tithing money isn't
| getting them anything in a presumed afterlife.
| jl2718 wrote:
| Actually I'm heartened to see people defending religion on
| HN. Tithing to a church you truly belong to is probably a
| better use of your money, even purely by personal benefit,
| than tithing Wall Street. I hope that I've introduced some of
| those ideas in the text by making a negative comparison to
| the church. But yes; it was sloppy and possibly interpreted
| as disparaging of religious practice itself, so for that I
| apologize.
|
| Meta: this is what I like about Hacker News. I get challenged
| to maintain disciplined thinking, often at the boundaries of
| the argument where I casually drift.
| jen20 wrote:
| I didn't see it as a defense of religion (it did not
| express an opinion) - more as a correction of your post.
| tomcam wrote:
| > People tithe and sacrifice to their church for a promise of
| rewards in the afterlife.
|
| Huh???
| mistrial9 wrote:
| > People tithe and sacrifice to their church for a promise of
| rewards in the afterlife.
|
| could you strengthen your argument by omitting casual broad-
| brush explanations of religion, please?
| jl2718 wrote:
| Well, I can't anymore, but, I might have instead said
| something about how religion is commonly maligned for such
| practices. This is only to show that modern investment
| practices bear strong elements of ritualistic faith. Your
| response is most welcome. Thank you.
| whatshisface wrote:
| How can everything go down at once, doesn't the money have to go
| somewhere?
|
| Best hypotheses so far along with how to test them:
|
| 1. Perhaps the parts of the CPI that companies in the stock
| market can produce are being outpaced by the components that are
| not produced, like real estate, and so can't contribute to an
| increase in share prices. (How to check: Look up changes in the
| CPI components, which are detailed in the reports.) (Edit: This
| does not hold up, almost all the increases are in energy, which
| is produced and held in reserve by public companies.)
|
| 2. Perhaps the consumer goods in the CPI are increasing in price
| far more rapidly than prices of goods and services overall,
| leading to an underestimate of the value of the dollar to anyone
| except a consumer. (How to check: Since capital goods are
| eventually used to make consumer goods, this should eventually
| correct itself. Also, is there a broader version of the CPI?)
| (Edit: This might be it, although energy is 8% of the CPI and
| GDP, it is only 4% of the S&P 500.)
|
| 3. Perhaps money is leaving the USD, US bonds, and US stocks and
| going somewhere else. (How to check: Make these same charts but
| with broader indices.)
| hobo_mark wrote:
| Recent noahpinion episode about this very topic:
|
| https://noahpinion.substack.com/p/where-does-the-wealth-go-w...
| whatshisface wrote:
| According to that explanation, the index value of a dollar
| should still go up when the price of all assets goes down.
| PheonixPharts wrote:
| > How can everything go down at once, doesn't the money have to
| go somewhere?
|
| How can everything go up at once, doesn't the money have to
| come from somewhere?
|
| Certainly we can have everything go up whenever we find more
| resources than we consume. Natural resources, when exploited
| create value for all. A more energy and resource rich world
| causes everything to go up.
|
| Why is it so hard to understand that increasing energy and
| resource constraints causes everything to go down?
|
| And, more specific to our situation, much of the perceived
| value is _credit_. If I owe you $100,000, as long as you know I
| 'll pay, you can consider that part of your value. But if I
| don't make enough to pay you, suddenly you aren't going to get
| that money.
|
| Our entire global economy is massively over-leveraged and the
| only way to maintain that is perpetual growth, in a real sense
| of having access to ever more energy and resources. When the
| future delivers less than expected we start seeing that value
| disappear from the books.
| jagtesh wrote:
| Short unambiguous answer is yes. However, the destination
| doesn't have to be limited to stock/bond markets. Think
| property, gold or toilet paper rolls. Last one is a joke.
|
| It's hard to accurately measure investments flowing into
| property (what part of the world?). There are many variables to
| consider and I don't think there's a single trend that will end
| up as a winner. My hypothesis is that we will see many (eg.
| very wealthy doing X in Y country/city, middle class doing A in
| B country/city, etc).
| whatshisface wrote:
| > _Think property, gold or toilet paper rolls. Last one is a
| joke._
|
| Since corporations produce commodities, wouldn't gold and
| toilet paper be on the stock market?
|
| I guess gold reserves (as opposed to production) and property
| would have a lot of ownership outside the S&P 500. I wonder
| if there are any super-broad indices that include them in a
| cap-weighted form.
| echelon wrote:
| The stock prices capture sentiment. The price people are
| willing to pay given all the other places their money could go.
|
| People are selling in anticipation of the market going lower,
| to cover debts, to take advantage of lower asset prices,
| opportunity costs, margin calls, etc.
| whatshisface wrote:
| When they sell they're wanting money, an equal amount of
| money to the stock they're selling. That should make the
| dollar go up by the amount the stock went down.
|
| (I don't really believe this, because it clearly does not
| describe the chart, but it makes sense and I want to
| understand why it doesn't work like that.)
| mrkstu wrote:
| Because money is a notational bookkeeping exercise at this
| point in time and has been since the dollar went off the
| gold standard. It can't be affected by demand for things as
| small as stocks, but only its relative demand to other
| notational currencies.
| whatshisface wrote:
| The total US stock market cap is $45T[1] and M2 is
| $20T[2]. Are you sure currency prices can't be influenced
| by the stock market?
|
| [1] https://www.statista.com/statistics/1277195/nyse-
| nasdaq-comp... [2] https://www.federalreserve.gov/release
| s/h6/current/default.h...
| mrkstu wrote:
| I think that just furthers the point- there isn't enough
| 'money' in M2 to 'pay' for all the stocks in the stock
| market. Yet there that value sits and real estate is
| another 20+ trillion in land value.
|
| In other words the actual 'money' is a transactional
| grease for the wheels of commerce- notational/bookkeeping
| mechanism.
|
| The sale of Apple (the largest value stock in America) as
| a whole probably couldn't be accomplished in cash only,
| but even if it was, it'd be mostly notational numbers in
| an account somewhere and wouldn't 'flood the market' with
| dollars and crash the value of the currency.
| whatshisface wrote:
| A change in preferences from holding dollar reserves to
| holding stocks could change the value of the USD, that's
| what I am saying.
| [deleted]
| notahacker wrote:
| Except that you've got a Federal Reserve actively
| ensuring that there aren't too many (or too few) dollars
| in circulation for the level of interest rate they want
| to maintain. They do it by buying and selling bonds
| rather than stocks, but the principle is the same. So we
| don't have to worry about shifts in portfolio preferences
| leading to an unexpected oversupply or undersupply of
| dollars
|
| But more people wanting to hold AAPL instead of hold cash
| absolutely will reduce the amount of AAPL stock your $1k
| is able to buy, of course
| whatshisface wrote:
| Maintaining an interest rate isn't the same as
| maintaining a fixed rate of CPI growth, especially not in
| the short run.
| notahacker wrote:
| Sure, but we're not talking about fixing the rate of CPI
| growth (stock prices aren't a constituent part of that
| and don't have a fixed relationship with it).
|
| We're talking about the effect of wealth holders wanting
| more of their investments in stocks or more of them in
| cash on the USD. An increase in demand for the liquidity
| of currency holdings, or an increase in demand for stocks
| due to perceived improved returns could affect the dollar
| through knockon effects on availability of credit, but
| the interest rate for that credit is the price of the bit
| the Fed fixes.
| mrkstu wrote:
| Change in preferring the Yen or the Euro, maybe, but I've
| never read/seen anything that would reinforce the idea
| that the dollar would be weakened by preference for
| holding other assets whose values are ultimately figured
| by their worth _in dollars_.
| rmah wrote:
| No, the money doesn't have to go anywhere. Nor does it have to
| come from anywhere when everything goes up at once. Because
| there is no money involved. It's sort of like asking "where do
| the pounds go when I lose weight?"
|
| You are conflating using "dollars" when used as a unit to
| measure the value something, with "dollars" as an asset in the
| economy when used to conduct trade. This confusion is easy to
| make (and widespread) because we use the same word for both
| things.
|
| The vast majority of wealth in an economy is not in monetary
| form. It's in hard and soft assets: land, buildings,
| cars/trucks, factories, raw materials, home appliances,
| copyrights, patents, film libraries, etc. The economic value of
| all those things is just _measured_ in dollars.
| s1artibartfast wrote:
| Unrealized gains can simply evaporate. If a crap company has a
| 1 B valuation and it fails, that money is gone. The value in
| stockholders portfolio just goes down, not to anywhere in
| particular.
| compumike wrote:
| Money (cash) is not wealth. Wealth can be created, or
| destroyed. The clearest explanation I've read for this was a PG
| essay: http://www.paulgraham.com/wealth.html specifically the
| "Money Is Not Wealth", "The Pie Fallacy", and "Craftsmen"
| sections. Of course this essay has a positive/optimistic take
| on it, but certainly wealth can be destroyed as well.
| whatshisface wrote:
| That's true, but I am not aware of any wealth indices, only
| price indices, and price indices can only increase and
| decrease relative to each other.
| JumpCrisscross wrote:
| > _I am not aware of any wealth indices_
|
| Term you're looking for is "benchmark."
| Symmetry wrote:
| Andrew and Barney are shipwrecked on an island with nothing but
| their clothes, the cash in their wallets, and a book Andrew
| has. Barney pays Andrew $100 for the book since he hasn't read
| it but Andrew already had. Later, after finishing it Andrew is
| able to buy it back for $80 because it's old to both of them
| but has a bit of sentimental value for Andrew. The dollar
| denominated wealth on the island has gone down by $20 but the
| same stuff and same number of dollars are there.
| roenxi wrote:
| I liked this explanation. Although to attach to it - in this
| example the price of the book is set by magic/intuition to
| illustrate the effect. In the real world, the prices are set
| by less flexible forces of supply, demand and people
| estimating valuation - usually in a way that means the price
| has to fall in some relatively narrow band. But after the
| dust settles on those inflexible forces, it ends up looking
| the same as this example.
| andsoitis wrote:
| I would expect the demand for the book to go down since the
| entire population has read it.
|
| Of course, you could use the pages to help start a fire for
| warmth or cooking fish you will be catching.
| whatshisface wrote:
| The consumer price index on the island has gone from $100 for
| the basket of one book, to $80 for the same basket, causing
| an increase in the measured value of currency equal and
| opposite to the decline in the price of the good. If you made
| the CPI more realistic by including other goods on the
| island, this website would show the dollar go up as the stock
| market (of booksellers with an interest in book prices) went
| down.
| roenxi wrote:
| The book is an asset in this example. CPI isn't relevant,
| because trading the book does not affect it.
| whatshisface wrote:
| The book doesn't represent any invested capital, so let's
| not say that it is an asset. Instead, let's say that
| there are shares in a book making company, tracked in the
| index, and also books, which will be in the CPI.
|
| The value of being able to make one book per day is
| linked to the price of a book, which means that on the
| island, the CPI and the stock market have to rise and
| fall together. That causes the stock market and currency
| to move inversely.
| roenxi wrote:
| Do you want an answer to your original question or do you
| want to try and argue that the stock market and currency
| move inversely?
|
| Because if you want an answer, you aren't making changes
| to the example that will help you understand. You're
| introducing confusing factors that are not needed. The
| original example gave a neat little illustration of how
| wealth-as-measured can drop without money disappearing.
| Don't bring CPI in to it (and stock prices don't drive
| the CPI so that is a reasonable assumption).
|
| If you want to argue that the two move inversely then go
| ahead and don't mind me, but you might like to add in
| some evidence or case studies. And you'll need to be
| precise about real vs nominal, and probably start
| modelling other effects.
| whatshisface wrote:
| My original question was how wealth-as-measured could
| disappear when dollars were included, not how demand for
| stocks could shift to demand for dollars. In a market
| with one good, the value of a dollar must move inversely
| with the value of the good (no examples needed, it's
| mathematically tautological) - and that is not what we
| see happening on the linked page. That's what my question
| is.
| chordalkeyboard wrote:
| > In a market with one good, the value of a dollar must
| move inversely with the value of the good (no examples
| needed, it's mathematically tautological)
|
| this is incorrect
| whatshisface wrote:
| I mean the value of the dollar as measured by the CPI.
| [deleted]
| roenxi wrote:
| You do mean that, but it doesn't have a lot of bearing on
| the correctness of your argument. I suspect you've
| assumed that wealth is neither created or destroyed
| somewhere in your logic, because what you are saying
| would make sense if that was an assumption. But that
| would be a poor assumption if you've made it.
|
| CPI is a tool for adjusting the value of a dollar, but it
| doesn't have any bearing on the value of the total
| economy vs the value of all the dollars in existence. All
| the dollars in existence might buy the entire economy
| many times over or they might buy a tiny fraction of it.
| And that ratio changes continuously (both from money
| creation and economic activity). There is no inverse
| relationship mediated by the CPI.
| whatshisface wrote:
| There are three charts on the linked website - bonds,
| dollars and stocks. None of them are exactly measures of
| wealth. My question is about how their properties as
| mutual numeraires could allow them to all fall at the
| same time.
| peterisza wrote:
| Money doesn't go into the stock market. If you buy a stock from
| me today, I can use the exact same money to buy bread tomorrow.
| That money keeps circulating in the economy, it doesn't go into
| or out of the stock market.
| nly wrote:
| Exactly. The current stock price is just the last price it
| traded at, or some measure of supposed liquidity or depth in
| the market at some price. That liquidity just exists as
| unfilled orders or quotes on the order book on an exchange
| and can vanish in an instant.
|
| The other thing is that buying stock for a company A isn't
| the same as "investing in" company A, since company A doesn't
| get your money...it's a secondary market!
|
| As buffet says, the stock market is a voting machine in the
| short term and a weighing machine in the long-term.
| nathancahill wrote:
| Needs a way to specify the time range. As you mention on the
| page, the trend lines are very dependent on the time range.
| kaycebasques wrote:
| I also just requested this via the feature request form in the
| footer of the site
| dcolkitt wrote:
| Would be interesting to insert the classic 60/40 stock/bond
| portfolio. Maybe also potentially a commodity index as well.
| skyde wrote:
| I wish the display of "Trendline' and "worst Drawdown" at the top
| would be calculated based on the selected time interval at the
| bottom.
|
| For index that have existed for a long time it make comparing
| with other index hard if we always include the full history.
| adrianmsmith wrote:
| One suggestion I would have - it's great that you can drag on the
| graph to choose a different time period. But the data at the top
| isn't changed by that change of time period, e.g.
| https://totalrealreturns.com/s/AAPL stays 1980 to current.
| Obviously Apple wasn't doing well before the return of Steve
| Jobs, so it'd be nice to see the data for a shorter time period
| e.g. in my case I'd love to look at e.g. APPL for 2000 onwards.
| [deleted]
| snake_doc wrote:
| Why not use Fed's preferred measure PCEPI for longer term
| aggregate inflation adjustments? CPI is not adequate for long
| term adjustments for a variety of reasons.
|
| The common capital market comparison for these equity returns is
| against real risk-free returns. That benchmark is largely missing
| here.
| zitterbewegung wrote:
| This is neat you can see the s&p having gained approximately 6
| percent on average and inflation targeted almost to be 2 percent.
| londons_explore wrote:
| Total inflation-adjusted returns are what everyone should be
| looking at when considering investments.
|
| Yet it seems so awfully hard to find that data on stockbrokers
| sites/apps.
|
| Why?
| compumike wrote:
| I agree and that's why I decided to build it :)
|
| I think part of the answer is that: (1) it's _very_ hard to
| explain what that means to most people ( "WTF, why are the
| historical prices on this chart changing?") beyond simple 2:1
| splits, and (2) it's hard to get everyone to agree on what
| inflation metric to trust/use.
| HFguy wrote:
| Short answer is some combination of (1) That requires work and
| then they would have to explain to people and (2) People aren't
| asking for it.
|
| If you want to roll your own, you can use free data from Yahoo
| and FRED and get there pretty quick.
|
| You should also consider tax implications. For example, trading
| equities short-term is awful and PL taxed at income rate.
| Compare that to buying real estate which has a 101 ways to
| avoid paying taxes.
| kurthr wrote:
| What I like most about this is the logarithmic plot of prices.
| That makes multiplicative % return a constant size and allows for
| easy representation of exponential growth.
| 01100011 wrote:
| Aren't dividends taxed? If so, you should have a way to set the
| tax rate for them so folks can evaluate performance in a taxable
| account vs tax free.
| leethargo wrote:
| I don't understand the details on how inflation is measured here,
| but I expected the US Dollar curve to be a constant 1, after the
| normalization. However, it seems to go down. What does that mean?
| That the dollar loses value faster than "money is printed"?
| compumike wrote:
| Here's what the site does behind the scenes:
| real_price($ASSET, t) = nominal_price($ASSET, t) *
| (price_level($NOW) / price_level(t))
|
| Where price_level(t) is the CPI-U series (with interpolation).
|
| If t = $NOW, at the right side of the chart, then the fraction
| goes to 1, so that real_price($ASSET, $NOW) =
| nominal_price($ASSET, $NOW)
|
| (Though many comments are requesting alternative normalization
| schemes!)
|
| For cash (USDOLLAR), nominal_price(USDOLLAR, t) = 1 for all t
| -- the nominal price of a dollar bill is always 1. So
| https://totalrealreturns.com/s/USDOLLAR is plotting a curve
| that looks like 1/price_level(t). (Actually it's
| 1*price_level(now)/price_level(t), because of the normalization
| above.) And you can download price_level(t) from
| https://download.bls.gov/pub/time.series/cu/.
| kqr wrote:
| You're thinking of the inflation adjustment the wrong way
| around. A dollar earned in 1980, if, saved until today, buys
| less than it would have then.
| leethargo wrote:
| Yes, your second sentence makes sense to me.
|
| I guess I imagined the inflation-adjusted value of X to be
| defined at time t to be something like: value(X, t) /
| value(USD, t). So, when I substitute USD for X, I get
| constant 1.
| aidenn0 wrote:
| That was almost right; the correct denominator is
| value(USD, SOME_FIXED_TIME). Nominal (i.e. non-inflation-
| adjusted) use value(USD,t) as the denominator implicitly
| when priced in dollars (hence the term "dollar
| denominated")
| nostrademons wrote:
| Wish it had the 70s, or ideally, the whole 20th century. The
| 80s-2010s has been a period of unusually low inflation and
| consistent market returns, buoyed by the end of the Cold War and
| entry of the developing world into the world economy. There's a
| good chance that we revert to the mean going forwards and see
| much more geopolitical instability and resource constraints.
| Teknoman117 wrote:
| So, what does a young person do these days?
|
| First few years out of college were just "max out 401k
| contributions into some target fund" + build emergency fund,
| but now that I've amassed more cash than what an emergency fund
| requires, what does one do?
|
| Originally, my plan was to use it for a house down-payment, but
| with the mortgage rates having nearly doubled in the last 6
| months, that's kind of out of the question at this point
| (especially having moved to a higher property value area to be
| closer to friends and family).
|
| Everything I've seen in the news for last few months just seems
| to say "sorry, the last 50 years was a gravy train, it'll never
| work that way again, you're screwed".
|
| Both my parents' and grandparents' entire careers existed (or
| to this point existed) during the "good times", so I'm honestly
| feeling like I can't just take their advice directly.
|
| Part of me wants to leave my present (tech) job and move to a
| FAANG type company (for the pay increase), but with all the
| uncertainty on the horizon, are the big tech companies going to
| maintain their current headcount or salaries if another '08
| style recession (or worse) hits? How stable are their revenues
| if people start spending way less money on things?
| mlcrypto wrote:
| Born too late to buy 20k House. Born just in time for 20k
| Bitcoin.
| tootie wrote:
| House prices are at a peak and stocks are in a trough. Try to
| make clear economic decisions and don't be enamored with home
| ownership. A house is a huge illiquid asset that you can live
| in. There's calculators out there to use but know that buying
| a house usually only makes sense if you're definitely staying
| for at least 10 years. And don't be swayed by headlines. Big
| tech is doing extremely well and isn't slowing down.
| aluminaient wrote:
| The only time stocks have been this expensive was just
| before the great depression and just before 2008. They are
| practically the most overvalued they've ever been, ignoring
| the last year or two of QE, which were intuitively
| overpriced. Thinking they are cheap now is how you get
| burned.
| tootie wrote:
| By what metric? The P/E ration for the S&P 500 is not
| historically very high right now.
| anon291 wrote:
| > Originally, my plan was to use it for a house down-payment,
| but with the mortgage rates having nearly doubled in the last
| 6 months, that's kind of out of the question at this point
| (especially having moved to a higher property value area to
| be closer to friends and family).
|
| Higher interest rates lead to lower home prices, which should
| make it easier to make a down payment. Interest rates may
| double, but mortgage payment amounts typically end up staying
| the same. You are in a prime position to buy a house. In the
| next 30 years, mortgage rates will likely decrease and you
| can refinance to a better rate, and end up paying a lower
| price for your house than what you would have had mortgage
| rates stayed low.
| Carp wrote:
| That's what my plan is. Just waiting/hoping housing prices
| drop within the next year or two. Been waiting a while now
| though so who knows if they'll actually come down
| anon291 wrote:
| Home prices are coming down in my area of Portland, OR,
| which was already an overpriced market. Homes have been
| on the market much longer, and several homes have had
| price reductions in my neighborhood. Ultimately though, I
| wouldn't try timing the market, if you can afford the
| down payment, and the monthly, and like the house, I'd go
| for it. Always time to refinance later.
| jokethrowaway wrote:
| Portland got some pretty negative press in the last few
| years.
|
| I barely knew Portland existed before that and now I just
| know I wouldn't want to settle there.
|
| Real estate seems still up in general, I assume because
| of a mix of inflation and BlackRock / investors
| overpaying for it to escape all the other failing assets
| ricardobayes wrote:
| It will be tough finding where the sweet spot is of
| lowest prices vs still acceptable interest rates.
| loxias wrote:
| > now that I've amassed more cash than what an emergency fund
| requires, what does one do?
|
| Pick a few things you can put your money into, which you have
| confidence won't lose value given a long enough time horizon.
| For me, this is SPY (highest alpha but needs 10 years to
| recover). The traditional 60/40 SPY/TLT mix is great.
| Currency funds also good. VTI & chill is good. Right now the
| Euro has Dollar parity (ECB isn't fighting inflation
| aggressively and won't start reducing its balance sheet for a
| while), maybe throw some of that into the mix.
|
| Sell covered calls to reduce your cost basis.
|
| Don't spend cash. Invest cash, borrow against it at favorable
| interest rates, and make purchases with the borrowed money.
| SBLOC, portfolio margin (>100k) can unlock some _cheap_ (75bp
| above prime) cash.
|
| If I could send a message to myself 20 years ago it would be
| the above.
|
| All of my words are nonsense, nothing in this comment shall
| be construed as professional or financial advice. I've been
| excessively stupid with money far longer than I should.
| Swizec wrote:
| > So, what does a young person do these days?
|
| Barbell investing from Taleb makes the most sense to me. Cap
| your downside, go balls out with the rest.
|
| And prioritize long-term assets over cashflow. Revenue
| generating assets are best.
| throwaway894345 wrote:
| > Cap your downside, go balls out with the rest.
|
| This doesn't mean anything to me. Can you elaborate? Also,
| why are revenue generating assets better, and doesn't
| pursuing revenue generating assets imply prioritizing cash
| flow? Sorry for the noob questions.
| Swizec wrote:
| > This doesn't mean anything to me. Can you elaborate?
|
| Taleb elaborates better in his very accessible book(s).
| The basic idea is to invest/use most of your net worth in
| "safe" investments, those primarily keeping up with
| inflation or just barely beating it. If shit hits the
| fan, you have a cushion to fall back on.
|
| Anything beyond keeping you safe and comfortable enough
| should go chasing the highest returns possible. So you
| can partake in as much upside as possible.
|
| Startup comp follows this logic. Enough salary to fund
| your life and basic savings, equity to chase high upside.
|
| Revenue generating assets are nice because you don't just
| need to sell for a higher price to make a return. They
| have intrinsic value. For example owning a profitable
| business or a rental property.
| throwaway894345 wrote:
| Thanks for the explanation. That was very concise and
| accessible!
| gumby wrote:
| > Everything I've seen in the news for last few months just
| seems to say "sorry, the last 50 years was a gravy train,
| it'll never work that way again, you're screwed".
|
| I first came to Palo Alto in 1984. All the houses were
| underwater (worth less than their mortgages). The tech boom
| was over and consensus was that it wasn't coming back. Too
| bad you missed that!
|
| Just keep investing (dollar cost averaging). Pick your
| poison: "barbell" as some other comments have suggested or
| just a couple of very broad index funds. Since you have a
| long time ahead of you, I'd recommend the latter. You can
| spend some of it on a down payment when that makes sense to
| you.
| mywittyname wrote:
| People tend to not appreciate the struggles that the people
| before us had. We are looking at their situation with the
| absolute knowledge that things got better.
|
| We distort the lives of those in the past much in the same
| way do the people we follow on social media.
| smallerfish wrote:
| Don't buy a house until the real estate market crashes. Then
| buy.
|
| I bought a fixer-upper in 2008 for 200k; sold it for 425k 5
| years later. Recently it sold for 650k (we still get redfin
| notifications.) In the meantime I bought a house for 625k
| (nice house with some rough edges) and sold it 18 months ago
| in covid real estate madness for 950k. We certainly put money
| into both houses over time, but we'd never have been able to
| do what we did had we not started at the bottom of the
| market.
|
| Wait a year or two.
| mywittyname wrote:
| > Wait a year or two.
|
| The Great Financial Crisis will be the only event of this
| nature in our lifetimes. The country would need to
| overbuild like crazy to cause housing to crash like that
| again.
|
| Everyone is expecting housing prices to fall in "a year or
| two." I've been hearing this for two years now. The market
| has a habit of doing the opposite of what people expect it
| to.
| x3sphere wrote:
| Housing prices are correcting now, at least in some
| areas. It's definitely happening in AZ. I've seen drops
| of almost 15%.
|
| OpenDoor has been taking a loss on a lot of properties it
| bought over the past few months too.
|
| Considering inventory is up over 2X YOY as well, I expect
| prices to fall even further here. I'm not sure if it'll
| get as bad as 08 though, but a 30-40% drop isn't out of
| the question the way things are headed imo.
|
| The thing is though with rates as high as they are,
| housing prices dropping this much actually doesn't make
| affordability any better unless you can pay in cash.
| dvt wrote:
| > Wait a year or two.
|
| The real estate market won't crash, and it _especially_ won
| 't crash in high-demand areas (Southern California, the Bay
| Area, Atlanta, SoFlo, Colorado, etc.). We'll likely see a
| steep-ish correction in "second-tier" markets, like the
| ones in Texas, Tennessee, and the Rust Belt (Pittsburgh
| comes to mind).
| MaxHoppersGhost wrote:
| If history repeats itself you are dead wrong. During 2008
| the Texas market barely flinched while California and
| Florida was tanking. I think Texas won't budge much again
| considering the consistent flow of people and jobs to
| Texas in pretty much every major city.
| FooBarWidget wrote:
| What if the house market crashes in 10 years? Live in a car
| for 10 years?
| [deleted]
| stavros wrote:
| Are "buy" and "live in a car" the only two options?
| FooBarWidget wrote:
| You can rent, but that's money wasted. The longer you
| rent, the longer you didn't invest. Also rents are higher
| than mortgage payments, making it worse.
| GoldenStake wrote:
| But are rents higher than the mortgage + insurance +
| maintenance + lack of liquidity + the potential home
| value changes. If the expectations is that the home value
| are dropping, the math seems pretty simple.
|
| But in a different financial environment, maybe a few
| years from now, your expectations might be different and
| the math works out differently
| gabereiser wrote:
| Go for the house down payment and refinance once the rates go
| down. A few percentage points aren't going to make much
| difference near term.
| garrickvanburen wrote:
| To me, <~6% APR is still a buy signal.
| cercatrova wrote:
| You do the same thing that was recommended for the past 100
| years, invest in VTI and chill.
| [deleted]
| dsomers wrote:
| IIRC the book 'Common Sense on Mutual Funds' has data going
| that far back with charts. I believe the period from the start
| of the 20th century until the 70s had similar inflation
| adjusted returns. However, for the early data I think it was
| really just measuring the largest companies in the country that
| made up the original Dow. Although, the author argues that's a
| fine comparison because the 30 largest companies in the country
| represent the large majority of the top 500 index in terms of
| cap today-- he further argues that over the long term small cap
| and large cap stocks give similar returns regardless.
| Invictus0 wrote:
| Does this account for dilutive secondary offerings?
|
| Edit: I thought about it some more and now I realize this is a
| dumb question.
| compumike wrote:
| Only implicitly. (In that, via market behavior, the nominal
| price-per-share might drop when companies increase the number
| of shares outstanding.) But I believe that's all that's needed?
| loeg wrote:
| What is the Total Real Drawdown chart supposed to show? Does it
| just reset where 0% is every time the fund reaches a new market
| high?
| elil17 wrote:
| Yes, that's correct.
| loeg wrote:
| Seems like a kind of useless visualization?
| nemo44x wrote:
| As of today, you need about 12% returns to break even after
| inflation and the IRS eat your return. Anything less than that
| and you are effectively losing. Especially annoying that capital
| gains taxes will be paid on any profits, even those less than
| inflation. Time for a new rule.
| zaroth wrote:
| Inflation is a good reason _why_ long term capital gains rates
| are lower than income tax rates.
|
| You can argue about the timeframe and getting the whole break
| after 1 year versus maybe giving larger breaks the longer you
| hold, but that's the weeds.
| nemo44x wrote:
| Principal should be adjusted for inflation. If I invest $10k
| and the investment is worth $11k today but we've experienced
| 10% inflation in that time then my actual profit is 0 and I
| should pay no tax on the $1k of proceeds.
| throwawaylala1 wrote:
| Wouldn't you lose more just by sitting on cash? Even now?
| nemo44x wrote:
| Yeah, unless you have it earmarked for something today it
| isn't worth having cash lying around except for buffer funds.
| It's a bad time all around right now. Best off sitting on
| investments for the foreseeable future.
| danuker wrote:
| You can get ROIs better than the stock market.
|
| Some examples are education, and if you own a home, an energy
| audit.
| rrevi wrote:
| "Rendered by the Crystal programming language in 739 us."
|
| Very nice!
| kaycebasques wrote:
| Thank you for creating this. I appreciate its value and encourage
| you to keep going.
| Animats wrote:
| Over 30 years, you did OK. But there were 10 year down periods.
| jackallis wrote:
| amy "only issue" is now what? sure chart looks to good to look;
| there is good info but what actions do i take now that inflation
| eats everything, like salt to metal.
| moneywoes wrote:
| Where can I see the percent return inflation adjusted not just
| the trend line?
| compumike wrote:
| I'm not currently showing this directly because it's so
| sensitive to the specific start and end dates. :-/ (Is there a
| good UX for that?)
|
| For now you could calculate it by mousing-over the dates your
| interested in and reading the values off the chart legend.
| lostmsu wrote:
| No cryptos?
| compumike wrote:
| You can use ETFs that hold those assets, for example:
| https://totalrealreturns.com/s/GBTC,ETHE
| lostmsu wrote:
| No, you really can not: https://habr-
| com.translate.goog/ru/post/675802/?_x_tr_sl=ru&...
| dmurdoch wrote:
| Well, you're both right and wrong. He's right You CAN, but
| your linked article is also 100% correct, GBTC / trusts are
| absolutely NOT etf's.
|
| There are however etfs for crypto in other districts (I
| hold for example ethx.b, a canadian ETF that tracks ETH
| within my RRSP).
| lostmsu wrote:
| Well, the funds you mentioned are not on the website.
| TekMol wrote:
| I tried to look at QQQ to see the performance of the Nasdaq 100
| with dividends reinvested:
|
| https://www.tradingview.com/chart/?symbol=NASDAQ%3AQQQ
|
| But the difference is so small. Nasdaq 100 even performing
| better. Does QQQ pay out dividends or does the management fee eat
| up so much that the dividends get cancelled out?
|
| Since the development is so similar to the index, I guess they
| pay dividends.
|
| How can one see the Nasdaq 100 performance with dividends
| reinvested?
| freeqaz wrote:
| The baguette bit is what made it "click" for me. Thank you!
| simmons wrote:
| Very neat! It's easy to be discouraged seeing how much my
| investments have fallen in recent months. But this graph makes it
| seem like the stock market could still be on track, producing
| slow and steady gains in the long term, when we consider that the
| crazy bull market of the last couple of years was an aberration.
| (No guarantees about where the stock market goes from here, of
| course.)
|
| Now, if only I had a crystal ball, or at least was more in tune
| with the world of finance so I could have ridden the ups and
| downs more effectively. ;)
| Barrera wrote:
| The trick is the to get those inflation-adjusted returns you need
| 100% time exposure. No selling because circumstances force you
| to. No selling because you get spooked at a 50% drawdown. Not
| many people can tolerate even a 20% hit, which explains a lot
| about the situation the world economy finds itself in.
| compumike wrote:
| You're right, and the conventional advice has been to have a
| mix of stocks and bonds, with bonds to reduce volatility and
| preserve some of the wealth that you might need to access in
| the shorter term. However, what's unusual about the past few
| months is that bonds have been getting whacked too!
|
| Here's a comparison of four Vanguard funds, with stock:bond
| ratios of 80:20, 60:40, 40:60, 20:80 respectively:
| https://totalrealreturns.com/s/VASGX,VSMGX,VSCGX,VASIX What I
| find interesting is that they are all experiencing significant
| and comparable drawdowns right now.
|
| Here are treasury bonds with a comparison between duration:
| https://totalrealreturns.com/s/VFISX,VFITX,VUSTX
|
| And here are corporate bonds with a comparison between
| duration: https://totalrealreturns.com/s/VFSTX,VFICX,VWESX
|
| Even inflation-protected bonds (TIPS) are in trouble:
| https://totalrealreturns.com/s/VIPSX
|
| So right now, bonds are not doing much to provide the short-
| term real wealth preservation that lets people take the 100%
| time exposure risk.
| tunesmith wrote:
| Bond funds are different than bonds. With bonds, you can hold
| them to maturity and not get whacked.
| jlawson wrote:
| You can hold bond funds to the maturity date of the
| underlying bonds and get the same result (minus fees).
|
| But in either case, you still get whacked with inflation,
| which would show up on this chart as a drop.
| wing-_-nuts wrote:
| I'm of the old school bogleheads mentality. I've typically
| been ageInBonds since I started investing after the great
| recession. While I _expect_ poor stock performance, I am
| pretty shook by the poor returns on bonds. I accepted _years_
| of poor performance with the expectation that they would
| cushion the blow during the next recession, and they have
| done _nothing_.
|
| I don't know how long, or how bad this recession will be, but
| I will likely be much less willing to hold bonds going
| forward.
| smt88 wrote:
| > _No selling because you get spooked at a 50% drawdown._
|
| This is common-sense trading advice anyway. If short-term
| losses spook you into selling, you're probably doing too much
| stock-picking and are not long enough.
|
| In fact, this is the often-cited reason that active investors
| can't beat index funds consistently.
| TheFreim wrote:
| This is why I don't follow how my portfolio is doing, knowing
| doesn't give me much actual information and can often encourage
| bad behavior (admittedly I don't have many investments compared
| to many).
| s1artibartfast wrote:
| My philosophy is essentially buy low, hold forever.
|
| I don't put money that I might realistically need in the
| market
| deathanatos wrote:
| I mean... that defeats the point, no? Surely you must plan
| to use the money _at some point_ , even if that is just
| enjoying the end of your days. That's still a time horizon.
|
| > _I don 't put money that I might realistically need in
| the market_
|
| While it's great that you might have a time horizon far,
| far into the future, not everyone has that luxury. In
| _theory_ , I'm supposed to purchase a home & start a family
| around this point in my life, so that's a rather quick time
| horizon for at least some portion of my wealth.
| xeromal wrote:
| My strategy is to ignore it until about my late 40s early
| 50s and then start slowly cycling it over into more
| reasonable investments and bonds.
| s1artibartfast wrote:
| I think you have a point. I should have been more clear.
| What I'm saying is I don't account for anticipated
| withdraw when investing. That's not to say I don't or
| won't do it, just that it's not a consideration when
| putting the money in.
|
| I treat the question of if I can afford to take money out
| or if it is a good time to take money out as an entirely
| separate topic.
|
| I found that trying to optimize investing and weigh risks
| for a short-term Horizon will drive you crazy.
| SV_BubbleTime wrote:
| I'm with you.
|
| I consider this an area where the burden of knowledge will
| hit you pretty hard. Time suck along with stress, and
| performing at best case a few percent over an automated
| "MODERATE RISK" button.
|
| I don't have any more time in my life to track anything with
| the degree that it would take to "be good" at it.
| nestvine wrote:
| What tech stack are you using? The speed is impressive.
| compumike wrote:
| BACKEND:
|
| It's about 3000 lines of Crystal code https://crystal-lang.org/
| -- it's been an absolute dream to program in. Ruby-like syntax,
| statically compiled performance. Nice standard library. Would
| recommend :)
|
| Performance == caching
|
| Local ephemeral filesystem for shortest-term caching.
|
| Redis for shared medium-term caching and locking.
|
| S3-compatible object storage for longest-term caching (for raw
| data feeds pulled every evening by a cronjob).
|
| FRONTEND:
|
| Bootstrap
|
| uPlot https://github.com/leeoniya/uPlot
|
| Just a sprinkle of inline JS+CSS on the page.
| leeoniya wrote:
| uPlot spotted in the wild! <3
| compumike wrote:
| uPlot is great! Thank you for building it! :)
| adrianmsmith wrote:
| Visually it's a really nice looking site. If I may offer one
| suggestion, it would be to use a minus sign (unicode U+2212) for
| the negative numbers - by default, for historical pre-unicode
| reasons, computers tend to use a hyphen instead and it just
| doesn't look as good, at least to my eye!
| bornfreddy wrote:
| Thank you, TIL!
| jonathan-adly wrote:
| The problem with these kind of charts is the implicit message
| that history is the future. America have been on the dominant
| financial and militaristic force in the world for the last
| century and its equities have reflected that strength.
|
| Would it continue to be the same for the next century? Who knows!
| Ray Dalio and the Maxis think otherwise. Good work OP though!
| TameAntelope wrote:
| > Portfolio emphasizing U.S. and foreign large- and mid-
| capitalization value stocks.
|
| VFINX is not composed exclusively of US stocks.
| loeg wrote:
| It's an S&P500 fund; that is composed (exclusively) of large
| cap US stocks.
| zie wrote:
| That's not true. It's MOSTLY large cap US stocks, but it
| has some mid-caps, pretty much regardless of how you define
| mid-caps.
| loeg wrote:
| S&P publish a mid-cap index: the S&P400. It doesn't
| overlap the S&P500[1]. You have to have a generous
| definition of mid-cap to describe even the smallest
| S&P500 component as mid-cap. The 500th component has a
| market cap of ~$6B.
|
| Regardless, they're all US stocks; the comment I was
| responding to claimed they were not.
|
| [1]: https://www.spglobal.com/spdji/en/images/campaign/70
| 7133-us-...
| zie wrote:
| LOL.
|
| First the S&P 500 captures 80% of the entire US market,
| 80%! [0]
|
| Second, 6B is well within the middle of the Mid-cap range
| for at least one common definition: "Mid-cap (or mid-
| capitalization) is the term that is used to designate
| companies with a market cap (capitalization)--or market
| value--between $2 and $10 billion. " [1]
|
| Now some people might define mid-cap differently(and S&P
| tries to), but that doesn't change the math. If 80% of
| the US market is the S&P 500, then by definition some
| mid-cap has to be in there, or one has a very distorted
| view of what the middle means.
|
| US public companies are giant these days. Of course there
| are mid-cap only indexes(and funds), that has nothing to
| do with the S&P 500 though.
|
| As for all US stocks, it definitely depends on how one
| defines a US stock. S&P obviously has their definition,
| and it may or may not agree with your personal
| definition, but I generally agree that the S&P 500 is
| basically US companies.
|
| 0: https://www.spglobal.com/spdji/en/indices/equity/sp-50
| 0/#ove... 1:
| https://www.investopedia.com/terms/m/midcapstock.asp
| TameAntelope wrote:
| Not according to Vanguard[0] (the link is for VFIAX but
| that's just the admiral fund), the quote I gave was from
| Vanguard's own description of the fund's composition.
|
| You can take it up with Vanguard why they describe the fund
| as I've quoted[1].
|
| [0] https://investor.vanguard.com/investment-
| products/mutual-fun...
|
| [1] https://support.vanguard.com/
| loeg wrote:
| Vanguard notoriously calls mid-caps "small," e.g., VB.
| Anyway, they're not the ones who select S&P500 index
| components. I love Vanguard, but this is one case where
| they're kind of off-base.
| TameAntelope wrote:
| So Vanguard (venerated investment institution for 50
| years) is wrong and you (random HN commenter) are right?
|
| Sure, okay.
| compumike wrote:
| Thank you. :)
|
| I agree with the "Who knows!" and that we've benefited from a
| lot of favorable tailwinds, which are quite uncertain for the
| future.
|
| The implicit positivity partially comes from looking at
| indexes, rather than individual companies. If you look at any
| specific companies that may have been unstoppable corporate
| giants in decades past (maybe try
| https://totalrealreturns.com/s/GE
| https://totalrealreturns.com/s/X
| https://totalrealreturns.com/s/F for example?) the idea of
| limitless growth becomes much more uncertain.
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