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  • Great, excellent analysis!
    I don't completely understand the chart: what is the historical probability of negative return after 5 years?

  • Well, you'd have to count the dots! Or I could dig out the script and data later on. But it's something like 80-90% chance of positive return and most of the time if you have a negative return it will be small magnitude

  • Thanks. Your other post says 90% for 10 years so I expect its maybe nearer 80%. So chances are you'll come out with a profit, but a loss is not highly unlikely.

    The other point I'd emphasise (not to you as you know this but others who might not) is this is past performance which isn't necessarily a guide to the future, etc, future performance could be different, for better or worse.

    Equities are best for very long term stuff like pensions which you won't need for decades. Once you start getting into shorter periods this shows well how the risk increases.

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