[shoto_io]

My stock advice for any rookie has always been the same:

- Buy S&P ETFs, most preferably by Vanguard, because they are a non-profit and thus have very low fees

- If you have a large sum of cash, go all-in immediately, don't wait for the perfect time

- Now, just wait, ideally 10+ years, before looking into your account again

[lr1970]

> Buy S&P ETFs, most preferably by Vanguard, because they are a non-profit and thus have very low fees

Vanguard is certainly a for-profit organization [0]. What, I think you wanted to say, that many of the Vanguard funds are index funds that do not have exuberant management fees.

[0] https://en.wikipedia.org/wiki/The_Vanguard_Group

[shoto_io]

Yes, you're right, I was not precise. That's what they used to say about themselves:

“The Vanguard Group is truly a mutual mutual fund company. It is owned jointly by the funds it oversees and thus indirectly by the shareholders in those funds. Most other mutual funds are operated by management companies that may be owned by one person, by a private group of individuals, or by public investors. ... The management fees charged by these companies include a profit component over and above the companies’ cost of providing services. By contrast, Vanguard provides services to its member funds on an at-cost basis, with no profit component, which helps to keep the funds’ expenses low.”

[tjader]

He probably meant to say that Vanguard is owned by the funds themselves, not by some external private entity. That makes their incentives be more aligned with making the funds cheap and efficient.

[abeppu]

But they did spend a long time saying that they were providing services "at cost", which was eventually removed.

https://www.inquirer.com/columnists/john-bogle-vanguard-scra...

[choward]

> Now, just wait, ideally 10+ years, before looking into your account again

That might not be the best idea because of escheat. Here's a story about someone who didn't check on their stocks for years and the state claimed them. https://www.npr.org/transcripts/799345159

[lisper]

It is also wise to look at your accounts at least once a year because some of your investments might pay dividends that you have to report on your tax returns.

[cehrlich]

For most major ETFs there are accumulating versions that automatically re-invest any dividends into the ETF. A good choice for the lazy investor IMO.

[lisper]

You still have to pay taxes on those dividends in the year they are paid.

[klipt]

In America, yes. The person you're replying to seems to live in Europe. I believe in many European countries there's no tax on accumulating ETFs that reinvest dividends, until you sell them and realize the capital gain.

In a way this erases the tax efficiency difference between dividends and buybacks.

[shoto_io]

Good point... I meant don't touch them :)

[melenaboija]

The poster says buy S&P ETF and walk away not stocks.

[nichohel]

ETFs do pay out dividends from the underlying stocks. This does not require you to look at the account (in the US you will get a form at the end of the year summarizing what you have to pay taxes on).

[thebean11]

So stocks can be seized and ETFs can't..?

[cehrlich]

Agree in almost all ways:

- ETFs, Vanguard is a good choice for most. If you're older and might need a large percentage of the money fairly soon, consider getting some bonds as well.

- Don't try to time the market

- Don't think you're smart

The only personal difference is I prefer FTSE All World as it is diversified into over 4000 global stocks, while the S&P 500 is (obviously) 500 American stocks. That being said the S&P 500 has been outperforming the FTSE All World for a long time, and I certainly don't want to give anyone specific investment advice.

[jandrewrogers]

Many companies in the S&P500 source much of their revenue globally. They are registered as US companies but their business exposure covers the world, so you achieve much of the same diversification but in a US legal framework for business and securities.

[logicalmonster]

Historically speaking, I think this has been one of the best things an average person could do within the context of a stable, safe, free, and productive society, but I don't think this kind of generic advice is really persuasive in the different and more turbulent world that exists right now.

Additionally, because of many societal conditions, right now many people think they need to hit on a moonshot to have a good life. And given the direction that inflation and many other things seem to be headed, it's harder to argue that they're wrong. Slightly increasing your financial floor matters little if the floor is still dirt.

[epistasis]

Owning equities (through index funds) is one of the best ways to always beat inflation. They are the part of the economy that appreciates because of future returns, in future money, not past dollar amounts.

That said, most of current CPI "inflation" is not economy wide price increases, but comes from 1) car prices, because car manufacturers massively messed up and production is way down for the past two years, and 2) energy, which is from several global market issues. There's also housing, which is not in CPI, but that's also easily attributable to underproduction of housing since 2008 (and probably even for decades before that, honesty).

We are actually in incredibly good economic times, especially considering the massive destruction that the pandemic has wrought, and in the US, the lowered number of workers due to years of reducing immigration. I am glad people are not overly exuberant, but I with they were focused on the things that mattered more.

[nickpp]

But most of all, the insane amount of money printing that went on during the pandemic.

[epistasis]

If that were the case that too much money was printed, then one might expect broad economy wide price inflation, but instead it's really focused only in areas that have supply bottlenecks.

But too much money printing wouldn't cause the major auto manufacturers to majorly underproduce less than they typically do, and it wouldn't cause energy to go up. Of the 5.5% "excess" points of inlfation, the breakdown of cost areas is:

2.1 vehicles (of which 1.6 is used cars)

1.8 energy

0.7 food

0.6 housing

And except for food, there are clear supply bottlenecks there. For food, beef farmers have been complaining about monopsony from meat processing plants for more than a decade. There's likely a small amount of rentierism going on there. As there is for the housing crunch. (Though housing also takes a long time to respond to changes in demand patterns, such as the one induced by the pandemic)

[shoto_io]

That's the story for many decades now. It turned out wrong every time.

See for example: https://ritholtz.com/2019/08/death-of-equities-40th-annivers...

[SantalBlush]

Very true. On the other hand, it was previously believed that the real estate market could never go down, which led to highly leveraged positions in that market from homeowners to banks.

[adamsmith143]

Seems like the solution to the turbulent world we are in certainly isn't pick your own stocks or YOLO on crypto.

[logicalmonster]

What does a broke person who will not be able to pay off their student loans for decades and who will never be able to afford a house care about being slightly less broke? Your life is a painful grind either way where you're just barely staying afloat. If you're stuck in poverty barring a risky long-shot hitting, then it's entirely logical and rational to take big risks with the little you do have.

The real problem isn't that stocks or crypto or any other financial tools exist, it's that so many Americans lack reasonable hope and opportunities for a better future outside of seeking out things that seem unthinkably risky to many people here.

[adamsmith143]

Why not go to Vegas and play roulette then? At least there you know exactly what your odds and payouts are and there isn't a massive information asymmetry.

I just don't think saying "Don't put your money in ETFs where you can get returns of ~10% a year for 40 years barring mass catastrophe" is particularly valuable. Even someone putting 83$ a month into an SP500 index can expect to make almost 400K over 40 years. Whereas I would expect a person yolo'ing 1000 a year on random shitcoins and memestocks to lose $40K over 40 years.

Maybe I'm crazy but I think if you can find 1000 a year to throw away on pure gambles surely its a far better choice to invest that in something that's virtually a sure thing on long time scales?

Everyone is looking for get rich quick schemes which frankly short of starting the next Instagram in your basement simply don't exist.

[lelandfe]

This is great advice for a young rookie, Bogle would be proud. Folks later on in life may not have the timeline to stomach that risk, however.

[SketchySeaBeast]

But if those who are older need even less risk, the good option still isn't picking individual stock.

[shoto_io]

Yeah, right. Older rookies should follow this advice only if they want to invest that money for later generations.

[fmx]

Why S&P 500 specifically? Is it just because they have the lowest fees you've found? There are many index funds all over the world to choose from. What if I could find a fund with with even lower fees than VTSAX somewhere? I often hear "don't pick stocks, just buy 'the index'" - but you're still picking an index, aren't you?

[hartator]

> Buy S&P ETFs

Nitpicking but S&P has multiple indexes. And you probably mean just a total stock market indexes; not necessary S&P.

[shoto_io]

Yes absolutely… my fault, should have been more specific. I was referring to the S&P500 index.

[lvl100]

This is such a bad advice. Buying an index is what they want you to do. They want you to buy and hold until you retire. Do you not see the problem with that logic?

[bestcoder69]

And the sickest part of their whole plan is the part when you get to withdraw more money than you put in. Luckily, crypto solves this problem.

[cecilpl2]

Of course you get to withdraw more money than you put in, because you owned productive assets.

Stocks are the middle class's ticket into the ownership class.

[xnx]

I think the previous post was sarcasm.

[cecilpl2]

Ah thanks, that flew over my pre-coffee head. :)

[Kye]

One person's hodl is another person's holup.

[unholiness]

The stock market is not a zero-sum game. Money-now is worth more than money-later to companies offering stocks, who know how to earn more money with that money. Long-term strategies simply take advantage of this fact to make long-term gains. Investments are just codified strategies on what ways you can put your idle money to work in someone else's hand.

Buying an index fund full of stocks at their current market price is no more illogical than running code you didn't write yourself. It's way way less work, it probably works better.

Better yet, trusting someone else's market price is much easier than trusting someone else's code because of the thousands of black-hat investors searching for profitable vulnerabilities in the market prices.

[asimpletune]

I don’t see the logic, can you explain this more?

[shoto_io]

Who is “they”?

[bestcoder69]

Owners of the index funds, like Vanguard. And Vanguard, in turn, is owned by... wait a minute... oh no... I'm realizing I can't say anymore.

[shoto_io]

thanks. got it. I have no clue why you're being downvoted...