So, I’ve been looking over my portfolio numbers. Turns out, I’m up about 90% over the last 4.5 years, which I thought was great! But then I looked at the S&P 500, and it’s done about the same over the same period.
Should I have just put it all in that instead?
Are you saying your portfolio basically mirrors VOO? This is exactly what Warren Buffett and Jack Bogle talk about… Just using a few ETFs to match or even beat high-paid Wall Street folks.
Kai said:
Are you saying your portfolio basically mirrors VOO? This is exactly what Warren Buffett and Jack Bogle talk about… Just using a few ETFs to match or even beat high-paid Wall Street folks.
And you can do that with just one ETF now.
Just subtract the S&P return from your return and see what you actually made over it.
Noel said:
Just subtract the S&P return from your return and see what you actually made over it.
Yep. Also, adjust the volatility so you’re comparing apples to apples.
Noel said:
Just subtract the S&P return from your return and see what you actually made over it.
Yep. Also, adjust the volatility so you’re comparing apples to apples.
Surprised no one here mentions the Sharpe ratio! It’s a simple way to measure exactly what you’re all discussing.
@Kellan
Sortino ratio might even be better.
Or even Omega Ratio.
Don’t forget about the Ligma Ratio!
Fielder said:
Beck said:
@Kellan
Sortino ratio might even be better.
Or even Omega Ratio.
Don’t forget about the Ligma Ratio!
Ligma Ratio? What’s that?
@Tory
Ligma nuts!
If you really want to feel it, calculate how much time you’ve spent thinking about trading, then work out your hourly earnings versus what you’d have made if you’d just followed the S&P.
San said:
If you really want to feel it, calculate how much time you’ve spent thinking about trading, then work out your hourly earnings versus what you’d have made if you’d just followed the S&P.
Some of us actually like this kind of torture, though.
San said:
If you really want to feel it, calculate how much time you’ve spent thinking about trading, then work out your hourly earnings versus what you’d have made if you’d just followed the S&P.
Also, try looking at your returns after taxes. If you’re actively trading, you probably have a bunch of short-term gains, and the S&P or VTI would’ve given you mostly deferred long-term gains, compounding along the way.
San said:
If you really want to feel it, calculate how much time you’ve spent thinking about trading, then work out your hourly earnings versus what you’d have made if you’d just followed the S&P.
But no one’s paying you for that time anyway, right? So it’s kind of a pointless thought. You have to put in the work to grow your money because no one’s going to do it for you.
Jo said:
@Rin
Someone absolutely could pay you. It’s a choice between spending time trading or just putting it in indexes and using your time elsewhere.
No offense, but we’ll just have to disagree. Whether you’re salaried or self-employed, it takes time to build something, and that’s unpaid until you actually get clients or contracts.
@Rin
At least we’re learning along the way!
@Rin
You could be spending that time with family or doing something else. Time has value too!
@Rin
Exactly—modern investment options like index funds give you nearly the same results without the extra work.