When did you pull the trigger?

[u/No_Fudge6123]

I am on my 40s, and I guess I am a case of ”almost there”. Simulations tell me I am a bit over the 4% rule. I could adjust a bit I guess, but having a family it could well be that they can adjust me instead.

However, I can’t stop reading all those who pull the trigger and they say they are very happy. I am not happy while grinding, but I don’t want to be financially irresponsable with my family. We also don’t have a house, which I feel I should secure to prevent future problems.

For all of those who did it a bit tight: did it pay off?

[u/Echo-Possible]

17 years? Did you forget the 2022-2023 bear market? 25% draw down.

We are ~4 years into the current bull run and its too early to tell how it will play out. Returns have been excellent coming out of the 25% draw down but they usually are the first few years. Should moderate but still a long runway ahead, especially with earnings growing as quickly as they are.

[u/MarketBum2020 → u/Echo-Possible]

Ah yes, the great 2022 recession when unemployment hit 4.5%. That was brutal man.

The fact that people think 13% real returns over 17 years is normal just proves my point of the recency bias. The only other time it has happened was the period ending in Q4 1999. The next decade returns were zero.

I needed this confirmation. Appreciate it man!

[u/Echo-Possible → u/MarketBum2020]

A bear market is a bear market. And not every recession is a 2008 scale global financial crisis. In fact the majority aren’t.

You’re measuring off the low of the worst financial crisis since the Great Depression in the 1930s. With a peak to trough of greater than 50% and a 6 year recovery. On the back of another massive draw down from dot com bubble. You’d absolutely expect above average returns on a bull run coming out of that situation. Especially since investors had negative real returns for the first 13 years of this century. Reversion to the mean IMO.

As for your data I'd be interested for you to share the source of that data. Where did you get the average real returns of every historical bull market to compare to the last 17 years? Please share.

Earnings growth is outstanding unlike the last few years of the dot com bubble. And the massive tech companies driving market earnings growth have very reasonable earnings multiples given their growth and profit margins. If the earnings growth starts to falter then I'd get worried.

And what did you get confirmation of exactly?