The stock market always goes up, over many years. I have a question about that.

[Xylitol]

If you look at any of the major stock markets - FTSE 100, FTSE 250, NASDAQ, Dow Jones etc. - they always go up over a period of many years. There are some years it goes down, for example the financial crash between 2007 and 2009. But if you take a long enough time frame, it always goes up.

Therefore, as a strategy, why don't you just invest equally among all the companies on that stock exchange? After 30 years, take out your money. You should have made a lot of profit over that time.

Is it really that simple? If I'm misunderstanding anything, please say. I would appreciate any expert opinions here. Thanks.

 

[darktone]

If you look at any of the major stock markets - FTSE 100, FTSE 250, NASDAQ, Dow Jones etc. - they always go up over a period of many years. There are some years it goes down, for example the financial crash between 2007 and 2009. But if you take a long enough time frame, it always goes up.

Therefore, as a strategy, why don't you just invest equally among all the companies on that stock exchange? After 30 years, take out your money. You should have made a lot of profit over that time.

Is it really that simple? If I'm misunderstanding anything, please say. I would appreciate any expert opinions here. Thanks.

Why yes it is, pretty much. As long as you dont get too hot and are emotionally free enough to just buy those dips and take a profit once in a while, you too can take over donate from the markets.
You know where money comes from? Eh eh, do ya do ya?

 

[Xylitol]

Why yes it is, pretty much. As long as you dont get too hot and are emotionally free enough to just buy those dips and take a profit once in a while, you too can take over donate from the markets.
You know where money comes from? Eh eh, do ya do ya?

Well if that's the case, why isn't everyone doing this? You can make easy profits with virtually no risk. The only downside is you have to wait a long, long time before you can take the profits.

There must be a catch to all this.

 

[foroom lluzers]

Well if that's the case, why isn't everyone doing this? You can make easy profits with virtually no risk. The only downside is you have to wait a long, long time before you can take the profits.

There must be a catch to all this.

These buggers here like short term gambling ,they like to see their horses bolt out of the stables at 100 mph (the excitement) ,as soon as they bet their money.

 

[itspossible]

Well if that's the case, why isn't everyone doing this? You can make easy profits with virtually no risk. The only downside is you have to wait a long, long time before you can take the profits.

There must be a catch to all this.

you can place a small bet using spreadbetting on the ftse or dow.bet on it rising.
if it goes up you make.
if it goes down you lose-sure you can hold and then WISH it back up but you may have bought at the very top and it may go down 1000 points from there.
It sure looks easy but it aint.

 

[Xylitol]

These buggers here like short term gambling ,they like to see their horses bolt out of the stables at 100 mph (the excitement) ,as soon as they bet their money.

Yes that's true, I'm sure most people want to make a quick profit, rather than wait years for one.

you can place a small bet using spreadbetting on the ftse or dow.bet on it rising.
if it goes up you make.
if it goes down you lose-sure you can hold and then WISH it back up but you may have bought at the very top and it may go down 1000 points from there.
It sure looks easy but it aint.

It can go up and down, sure. There's plenty of volatility in the short term. But I'm talking over many years.

 

[barjon]

If you look at any of the major stock markets - FTSE 100, FTSE 250, NASDAQ, Dow Jones etc. - they always go up over a period of many years. There are some years it goes down, for example the financial crash between 2007 and 2009. But if you take a long enough time frame, it always goes up.

Therefore, as a strategy, why don't you just invest equally among all the companies on that stock exchange? After 30 years, take out your money. You should have made a lot of profit over that time.

Is it really that simple? If I'm misunderstanding anything, please say. I would appreciate any expert opinions here. Thanks.

On reason the the indices (Stock market measures) always go up is that they are re-constituted fairly regularly with bum stocks replaced by up an comers outside the index. So if you've included any of the bum stocks you'll be losing.

 

[foroom lluzers]

On reason the the indices (Stock market measures) always go up is that they are re-constituted fairly regularly with bum stocks replaced by up an comers outside the index. So if you've included any of the bum stocks you'll be losing.

Companies grow and governments create inflation every year , the vast majority of this rise is fueled by money printing that started in 1972.

Since 1970 value of money has gone down by 400%

http://www.saving.org/inflation/inflation.php?amount=1&year=1950

 

[itspossible]

On reason the the indices (Stock market measures) always go up is that they are re-constituted fairly regularly with bum stocks replaced by up an comers outside the index. So if you've included any of the bum stocks you'll be losing.

Exactly true .
So just bet on the ftse using spreadbetting instead of buying individual stocks.

 

[Xylitol]

On reason the the indices (Stock market measures) always go up is that they are re-constituted fairly regularly with bum stocks replaced by up an comers outside the index. So if you've included any of the bum stocks you'll be losing.

Ok, that is the catch I was looking for. Thanks for explaining it clearly.

Exactly true .
So just bet on the ftse using spreadbetting instead of buying individual stocks.

That's true, you could just place a spread bet on the FTSE 100 index to increase over a 30 year period.

Now there must be a catch to that also.

 

[itspossible]

Ok, that is the catch I was looking for. Thanks for explaining it clearly.

That's true, you could just place a spread bet on the FTSE 100 index to increase over a 30 year period.

Now there must be a catch to that also.

The catch is that things could change and the markets may go into reverse for 30-40yrs-nothing is certain otherwise everyone would make money-look at endowment mortgages that were linked to the market.they are out of fashion now .
some one may press tho old button...............................

 

[Xylitol]

The catch is that things could change and the markets may go into reverse for 30-40yrs-nothing is certain otherwise everyone would make money-look at endowment mortgages that were linked to the market.they are out of fashion now .
some one may press tho old button...............................

Yes very true, nothing is certain and I wouldn't want to put a large amount of money in and lose it. I think I will do some more research on this.

 

[darktone]

Well if that's the case, why isn't everyone doing this? You can make easy profits with virtually no risk. The only downside is you have to wait a long, long time before you can take the profits.

There must be a catch to all this.

Take a look around you, take a look in the mirror. We have these things called beliefs

 

[darktone]

Yes very true, nothing is certain and I wouldn't want to put a large amount of money in and lose it. I think I will do some more research on this.

If you have a laymans grasp of what money is (and you should, shouldnt u :smart:) youll have some understanding of what that means for the prices of evvvveeeerythiiiinnnng, excluding the frilly bits, over time.
You can sort a slightly less than large amount of money and call 'risk capital'.
Then you can split the market into two halves, the downy bits and the uppy bits.
With the account opened you can calculate and execute at non tarder levels of risk in some appropriate instrument of your choices.
After youve got your arms round the pesky psych thing you can go forth and trade freely over whatever time scale, it dont matter much, and be profitable.

All will probably go well unless you happen to be trading when our monetary system fails. Or the little blue dot ceases to exist

 

[foroom lluzers]

Well if that's the case, why isn't everyone doing this? You can make easy profits with virtually no risk. The only downside is you have to wait a long, long time before you can take the profits.

There must be a catch to all this.

The only catch is the 12 inches between your ears , it is forbidden fruit to tell anyone everything.There is a lot of money at stake , so we just try to hide the forbidden fruits.

 

[Xylitol]

.

Ok. You're speaking in a bunch of riddles, but I mostly understand what you're saying. Like I say, I will do the research myself and come to my own conclusions. If I am in any reasonable doubt, I will not risk any money.

The only catch is the 12 inches between your ears , it is forbidden fruit to tell anyone everything.There is a lot of money at stake , so we just try to hide the forbidden fruits.

You're right, I'm not expecting anyone to reveal any big money-making secrets here. It was just a question I wanted some clarification on.

 

[seekingTruth16]

If you look at any of the major stock markets - FTSE 100, FTSE 250, NASDAQ, Dow Jones etc. - they always go up over a period of many years. There are some years it goes down, for example the financial crash between 2007 and 2009. But if you take a long enough time frame, it always goes up.

Therefore, as a strategy, why don't you just invest equally among all the companies on that stock exchange? After 30 years, take out your money. You should have made a lot of profit over that time.

Is it really that simple? If I'm misunderstanding anything, please say. I would appreciate any expert opinions here. Thanks.

It's a well known strategy, and reinvesting dividends is worth considering. There are a few things to bear in mind though.
1) If you tried this with a spreadbet firm for example, you don't actually own shares, so your broker could go bankrupt and you might lose your money.
2) If you bought at a bad time, say 2007 before the fall, 10 years later you would have a return of about 50%, which is ~4.6% per year. That's ok, but how does it compare with other investments (a house, bonds). It's not enough to live off either, unless you are investing a lot of capital.
3) Just looking at the price doesn't take into account inflation. What is 4.6% a year when it has been adjusted for inflation? Here's an inflation adjusted chart


http://www.multpl.com/inflation-adjusted-s-p-500

looking at this, if you bought the high between 1900-1910, 45 years later you're down almost 50% adjusted for inflation. 80 years later you're not far ahead of breakeven.

 

[lexcorp]

stick the money in the bank instead, and you don't even have to watch the market and your pot will increase

 

[lexcorp]

ps - seekingtruth gave the answer that I wanted too, but I gave up half way thorough writing it because i'm lazy

 

[postman]

If you look at any of the major stock markets - FTSE 100, FTSE 250, NASDAQ, Dow Jones etc. - they always go up over a period of many years. There are some years it goes down, for example the financial crash between 2007 and 2009. But if you take a long enough time frame, it always goes up.

Therefore, as a strategy, why don't you just invest equally among all the companies on that stock exchange? After 30 years, take out your money. You should have made a lot of profit over that time.

Is it really that simple? If I'm misunderstanding anything, please say. I would appreciate any expert opinions here. Thanks.

A serious question deserving a serious answer.

Generally people dont have £100,000 to invest for 30 years (it means they are 20 something and are in debt). So you have to buy shares in small amounts, this means you pay large fees to brokers who dont really want your small business and this eats into any future profit.

An alternative is to buy a tracker fund with low fees and make sure they re invest the dividends. Or as an added bonus if you really want to do it yourself, only buy the 60 or so shares that make up 90% of the value of the ftse and you will save on some fees.