I had a very simple dinner to cook for me and my son this evening. Cooking rice with pressure cooker is very fast, 15 minutes is enough. So I can finish it while I am prepare vegetables. I only cooked Dou-Fu with meet. The rest was done by my wife before she went to work. She works in 2nd shift during evening hours.
I don;t mean that stock investor should accept lower return than bond investor for long term. More risk associated with stock, so should be higher turn for stock investors. There are some discussions about how much higher for stock investors to justify the higher risk. The accepted rate is 3-5 percent higher than bond's return. So if bond's return in 10 years is about 3.5 percent, than, at current level, a 7.5 percent return from stock market should be acceptable. Comparing with historic return from stock market, this means a higher P/E value than the historic average P/E is acceptable.
I am not sure the p/E value can ever go so low since the internet made the stock investment so convenient. Basically, the stock price is no exception of basic economy rule 101--demand/supply. in the last 100 year, it seems to me that more and more people jumped into the stock market. With the population peaking, I wonder whether it is possible to hope the history to repeat.
Lower our expectation might be more realistic. That' why I decided to give up timing the market, and go DCA, and hopefully when the market makes a bull run, I have enough to ride the tide, while I lowered my expectation by adjust my life-style.
I remember the other day, you mentioned that you are looking for a model to have a proved return. The DCA is one of them, I believe. While my money is channeled in to the market, I am enjoying my life by fishing and gardening. Life is short, isn't it?
Have to go soon for son's piano lesson. Nice to discuss with you.
I don;t mean that stock investor should accept lower return than bond investor for long term. More risk associated with stock, so should be higher turn for stock investors. There are some discussions about how much higher for stock investors to justify the higher risk. The accepted rate is 3-5 percent higher than bond's return. So if bond's return in 10 years is about 3.5 percent, than, at current level, a 7.5 percent return from stock market should be acceptable. Comparing with historic return from stock market, this means a higher P/E value than the historic average P/E is acceptable.
I am not sure the p/E value can ever go so low since the internet made the stock investment so convenient. Basically, the stock price is no exception of basic economy rule 101--demand/supply. in the last 100 year, it seems to me that more and more people jumped into the stock market. With the population peaking, I wonder whether it is possible to hope the history to repeat.
Lower our expectation might be more realistic. That' why I decided to give up timing the market, and go DCA, and hopefully when the market makes a bull run, I have enough to ride the tide, while I lowered my expectation by adjust my life-style.
I remember the other day, you mentioned that you are looking for a model to have a proved return. The DCA is one of them, I believe. While my money is channeled in to the market, I am enjoying my life by fishing and gardening. Life is short, isn't it?
Have to go soon for son's piano lesson. Nice to discuss with you.
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