27-07-2024, 03:30 PM
If you bought an emerging market fund in 2004.
You beat the S&P500 for 15yrs until 2019...then the S&P500 catch up and went above.
If you look at the chart the emerging market was so strong within 3yrs 2004-2007 it achieved the returns of s&p500 for next 15yrs!
However if you bought after 2006 your return is zero for next 15yrs.
what does this tell us about long term investing
1. When market runs up quickly it "eats" the returns of the future and future returns fall.
2. When investing long term look for markets that did not run up too fast above its long term rate of return.
3. Market categories big caps vs small caps. Emerging markets vs USA. ...growth vs value...are like fashion they move in and out of fashion. In the end things regress to the mean.
![[Image: 3L3wKzy.jpeg]](https://i.imgur.com/3L3wKzy.jpeg)
You beat the S&P500 for 15yrs until 2019...then the S&P500 catch up and went above.
If you look at the chart the emerging market was so strong within 3yrs 2004-2007 it achieved the returns of s&p500 for next 15yrs!
However if you bought after 2006 your return is zero for next 15yrs.
what does this tell us about long term investing
1. When market runs up quickly it "eats" the returns of the future and future returns fall.
2. When investing long term look for markets that did not run up too fast above its long term rate of return.
3. Market categories big caps vs small caps. Emerging markets vs USA. ...growth vs value...are like fashion they move in and out of fashion. In the end things regress to the mean.
![[Image: 3L3wKzy.jpeg]](https://i.imgur.com/3L3wKzy.jpeg)