1. It assumes Buy and Hold and never selling- Cash is an Enabler, not always holding and keeping in Cash; so to assume people will hold cash from start to end is quite ridic; when there is no good reason to hold Cash, you buy performing assets including equities
2. Tell equity holders that Cash will be eaten up by inflation when the train wreck crash happens; cash earns 5pc while equities fall and could stay down for years. And Cash can be deployed to buy quality stocks in carnage.
3. Using equity indexes is fine provided people buy index funds but individual stock performance is far from reflecting index performance. They can be a lot better or worse, plus stock indices remove underperforming stocks to be replaced by performing ones every quarter or so, hence is misrepresenting true apples to apples comparison over time.
4. This is the narrative fund managers would like to perpetuate to keep people from redeeming their funds; but no one is telling people the s&P500 went nowhere for a decade after the 2008 GFC crash, a prospect that is now more likely given Where We’re At with economy and overvalued markets today
5. Funny how you get this presentation at the time when bulls are on the back foot, trying to hold and keep the faith. Poster is also a stale bull in lithium sector.
6. It perpetuates the Better for Longer mantra, the longer you hold the better the returns. It is not true for stocks that have had multi bag returns over a short timespan of 2-3 years that have greater probability of experiencing mean reversion as their previous growth trajectory can no longer be replicated. Better for Longer also not true for the so many stocks that imploded for a variety of reasons which have been featured quite extensively through the history of this thread. SVL was the latest example- arguably our largest market cap silver stock until Friday.
7. So buy index funds and keep for long term then? There is no surety just because we saw how history worked. The glory days of the US could be challenged in the coming decades, so history is not a good predictor of the future when we face a structural decline. But I am not writing US off, just pointing that US is at the most challenged period of its economic history so don’t assume that the prior returns can be necessarily replicated.
If Govts run bigger deficits, they print more money and that eventually would cause Gold to rise against fiat currencies. So I would rather use physical/digital Gold to hedge against inflation. I know I will never lose with Gold over decades because it has no management that could make stupid mistakes or makes decision to boost their own interests.
