vania-janet/multiturn-rag-retrieval-data huggingface dataset:
The issue is the time frame. With a one year investment horizon the only way for a fund manager to be confident that they are not going to lose their shirt is to invest your money in ultra conservative low volatility investments. Otherwise a year like 2008 in the US stock market would break them. Note if you are willing to expand your payback time period to multiple years then you are essentially looking at an annuity and it's market loss rider. Of course those contacts are always structured such that the insurance company is extremely confident that they will be able to make more in the market than they are promising to pay back (multiple decade time horizons).
If you need the money in 2-3 years time then you should invest in safe assets -- fixed income and term deposits. Why is investment horizon so important? If you are holding to 60 years old then it doesn't matter if we have a massive financial crisis in 5 years time, since the stock market will rebound (unless it's a nuclear bomb in New York or something) and by the time you are 60 you will be laughing all the way to the bank. Gains on risky assets overtake losses in the long run such that over a 20-30 year horizon they WILL do much better than a deposit account. As you approach 45-50, you should slowly reduce your allocation to risky assets and put it in safe haven assets such as fixed income and cash. This is because your investment horizon is now SHORTER so you need a less risky portfolio so you don't have to keep working until 65/70 if the market tanks just before retirement. VERY IMPORTANT. If you may need the savings to avoid defaulting on your home loan if you lose your job or something, then the above does not apply. Decisions in these context are more vague and ambiguous."
Yes, the newly bought shares will have a long-term holding period, regardless of when you sell them.  In addition, it's only a wash sale if you sold the first shares for a loss; it's not a wash sale if you sold them for a gain. Wikipedia mentions this: When a wash sale occurs, the holding period for the replacement stock includes the period you held the stock you sold. Example: You've held shares of XYZ for 10 years. You sell it at a loss but then buy it back within the wash sale period. When you sell the replacement stock, your gain or loss will be long-term — no matter how soon you sell it. Charles Schwab also mentions this: Here's a quick example of a wash sale. On 9/30/XX, you buy 500 shares of ABC at $10 per share. One year later the stock price starts to drop, and you sell all your shares at $9 per share on 10/4/XY. Two days later, on 10/6, ABC bottoms out at $8 and you buy 500 shares again. This series of trades triggers a wash sale. The holding period of the original shares will be added to the holding period of the replacement shares, effectively leaving you with a long-term position.
"If you're talking about a single stock, you greatly underestimate the chances of it dropping, even long-term. Check out the 12 companies that made up the first Dow Jones Industrial Average in 1896. There is probably only one you've heard of: GE. Many of the others are long gone or have since been bought up by larger companies. And remember these were 12 companies that were deemed to be the most representative of the stock market around the turn of the 20th century. Now, if you're talking about funds that hold many stocks (up to thousands), then your question is a little different. Over the long-term (25+ years), we have never experienced a period where the overall market lost value. Of course, as you recognize, the psychology of investors is a very important factor. If the stock market loses half of its value in a year (as it has done a few times), people will be inundated with bad news and proclamations of ""this time it's different!"" and explanations of why the stock market will never recover. Perhaps this may be true some day, but it never has been thus far. So based on all the evidence we have, if you hold a well-diversified fund, the chances of it going down long-term (again, meaning 25+ years) are basically zero."
The exact rate of return you get in the first decade matters a lot less than how much money you set aside regularly and that you keep contributing. See for example Your Investment Plan Means Nothing If You Don’t Do This by Matt Becker (no affiliation), which illustrates how it takes 14 years for saving 5% at a consistent 10% return to beat saving 10% at a consistent 0% return. So look through what's being offered in terms of low-risk investments within that 401(k). Go ahead and pick a money-market fund or a bond fund if you want to start out easy. If it gets you into the habit of saving and sticking with it, then the overall return will beat the daylights out of the return you would get from a good stock market fund if you stop contributing after a year or two. Especially (but not only) if you do pick an interest-bearing investment, do make sure to pick one that has as low fees as you can possibly find for what you want, because otherwise the fees are going to eat a lot into your potential returns, benefiting the bank or investment house rather than yourself. Just keep an open mind, and very strongly consider shifting at least some of your investments into the stock market as you grow more comfortable over the next several years. You can always keep a portion of your money in various interest-bearing investments to act as a cushion in case the market slumps.
"The short answer is the annualised volatility over twenty years should be pretty much the same as the annualised volatility over five years. For independent, identically distributed returns the volatility scales proportionally. So for any number of monthly returns T, setting the annualization factor m = 12 annualises the volatility.  It should be the same for all time scales.  However, note the discussion here: https://quant.stackexchange.com/a/7496/7178 Scaling volatility [like this] only is mathematically correct when the   underlying price model is driven by Geometric Brownian motion which   implies that prices are log normally distributed and returns are   normally distributed. Particularly the comment: ""its a well known fact that volatility is overestimated when scaled over long periods of time without a change of model to estimate such ""long-term"" volatility."" Now, a demonstration.  I have modelled 12,000 monthly returns with mean = 3% and standard deviation = 2, so the annualised volatility should be Sqrt(12) * 2 = 6.9282.   Calculating annualised volatility for return sequences of various lengths (3, 6, 12, 60 months etc.) reveals an inaccuracy for shorter sequences.  The five-year sequence average got closest to the theoretically expected figure (6.9282), and, as the commenter noted ""volatility is [slightly] overestimated when scaled over long periods of time"". Annualised volatility for varying return sequence lengths  Edit re. comment Reinvesting returns does not affect the volatility much.  For instance, comparing some data I have handy, the Dow Jones Industrial Average Capital Returns (CR) versus Net Returns (NR).  The return differences are somewhat smoothed, 0.1% each month, 0.25% every third month.  More erratic dividend reinvestment would increase the volatility."
Compare this to the fact that while an investment in the S&P might have similar returns over long periods of time, the stock market is much more volatile in the shorter term (as the past two decades have so eloquently demonstrated). It doesn't do you much good if an investment returns 10% per year over 30 years, if when you need the money it's down 30% because you bought at a local peak and have held the investment for only a year. Also consider if you go back to school, are you going to feel better about a $5.25/month payment or a $60/month payment? (Even if the payments on old debt are deferred while you are studying, you will still have to pay the money, and it will likely be accruing interest in the meantime.) Now, I really don't advocate emptying your savings account entirely the way I did in the example above. Stuff happens all the time, and some stuff that happens costs money. Instead, you should be keeping some of that money easily available in a liquid, non-volatile form (which basically means a savings account without withdrawal penalties or a money market fund, not the stock market). How much depends on your necessary expenses; a buffer of three months' worth of expenses is an often recommended starting point for an emergency fund. The above should however help you evaluate how much to keep, how much to invest and how much to use to pay off loans early, respectively."
I think you're not applying the right time scale here. ESPP (Employee Stock Purchase Plan) is usually vesting every 6 months. So every half a year you receive a chunk of stocks based on your salary deduction, with the 15% discount. Every half a year you have a chunk of money from the sale of these stocks that you're going to put into your long term investment portfolio. That is dollar cost averaging. You're investing periodically (every 6 months in this case), same (based on your salary deferral) amount of money, regardless of the stock market behavior. That is precisely what dollar cost averaging is.
I see three ways to do this. Note that I kept saying interest. I assumed for this answer you were only considering money being saved in a savings account. Money that is to be invested for the long term (college fund, retirement) have much different rules for contributions, use, deductibility, age rules: that they would tend not to be mixed within the same account.
What is the importance or benefit of the assumption that high-risk is preferable for younger people/investors instead of older people? Law of averages most high risk investments [stocks for examples, including Mutual funds]. Take any stock market [some have data for nearly 100 years] on a 15 year or 30 years horizon, the year on year growth is around 15 to 18 percentage. Again depends on which country, market etc ... Equally important every stock market in the same 15 year of 30 year time, if you take specific 3 year window, it would have lost 50% or more value. As one cannot predict for future, someone who is 55 years, if he catches wrong cycle, he will lose 50%. A young person even if he catches the cycle and loses 50%, he can sit tight as it will on 30 years average wipe out that loss.
I want to know why my investment is having loss in 4 to 5 months. As the funds invest in stock markets, the Pakistan stock market is going down in last 4-5 months from all time high. Should I liquidate my investment or wait in hope that it will grow again? This is opinion based and one cannot predict what will happen in future. The funds may grow or may loose value. If I loose all my investment value, is it insured. OR do I loose everything? The growth fund I understand is not guaranteeing any returns. in theory you can loose all the money, however practically there will be some value. If you need guaranteed returns maybe EFU Guaranteed Growth fund will be better choice.
"In my opinion, the key variable for you (and others) is not age, but ""vintage."" Your ""age"" suggests that you were born in the mid-1980s, in the middle of a bull market. The most remunerative investing periods for you are likely to be in your childhood (past) and middle age (forties and early fifties). Also your, ""old-old"" period (around age 80, in the 2060s), if you live that long. For now, you can, and perhaps should invest cautiously, like today's 40-year olds, with a heavy emphasis on bonds. The main difference between you and them is that you can shift to stocks in about ten years, in your mid to late 30s, while they will find it harder to do so when approaching old age."
"Price targets aren't set day to day, because of market fluctuations are so high from day to day. But in their stock recommendations, brokerage firms will often set price targets for ""one year out.""  These targets aren't set in stone, so use them at your risk."
With a long enough time horizon, no matter when you buy, equities almost always outperform cash and bonds. There's an article here with some info: http://www.fool.co.uk/investing-basics/how-when-and-where-to-invest/ Holding period where shares have beaten cash  There was a similar study done which showed if you picked any day in the last 100 years, no matter if the market was at a high or low, after 1 year your probability of being in profit was only 0.5, but after 10-20 years it was almost certainly 1.0.  Equities compound dividends too, and the best place to invest is in diversified stock indices such as the S&P500, FTSE100, DOW30 or indices/funds which pay dividends. The best way to capture returns is to dollar cost average (e.g. place a lump sum, then add $x every month), to re-invest dividends, and oh, to forget about it in an IRA or SIPP (Self invested pension) or other vehicle which discourages tampering with your investment.  Yes, values rise and fall but we humans are so short sighted, if we had bought the S&P in 2007 and sold in 2009 in fear, we would have missed out on the 25% gain (excluding dividends) from 2007-2014. That's about 3% a year gain even if you bought the 2007 high -beating cash or bonds even after the financial crisis. Now imagine had you dollar cost averaged the entire period from 2007-2014 where your gain would be. Your equity curve would have the same shape as the S&P (with its drastic dip in 2009) but an accelerated growth after. There are studies if you dig that demonstrate the above. From experience I can tell you timing the market is nigh impossible and most fund managers are unable to beat the indices. Far better to DCA and re-invest dividends and not care about market gyrations! ..
"Unfortunately, there is very little data supporting fundamental analysis or technical analysis as appropriate tools to ""time"" the market. I will be so bold to say that technical analysis is meaningless. On the other hand, fundamental analysis has some merits. For example, the realization that CDOs were filled with toxic mortgages can be considered a product of fundamental analysis and hence provided traders with a directional assumption to buy CDSs. However, there is no way to tell when there is a good or bad time to buy or sell. The market behaves like a random 50/50 motion. There are many reasons for this and interestingly, there are many fundamentally sound companies that take large dips for no reason at all. Depending on your goal, you can either believe that this volatility will smooth over long periods and that the market has generally positive drift. On the other hand, I feel that the appropriate approach is to remain active. You will be able to mitigate the large downswings by simply staying small and diversifying  - not in the sense of traditional finance but rather looking for uncorrelated products. Remember, volatility brings higher levels of correlation. My second suggestion is to look towards products like options to provide a method of shaping your P/L - giving up upside by selling calls against a long equity position is a great example. Ground your trades with fundamental beliefs if need be, but use your tools and knowledge to combat risks that may create long periods of drawdown."
Nearly all long-lived active funds underperform the market over the long run. The best they can hope for in almost all cases is to approximate the market return. Considering that the market return is ~9%, this fund should be expected to do less well. In terms of predicting future performance, if its average return is greater than the average market return, its future average return can be expected to fall.
In general, investors with a long period of time until they would need to withdraw the cash are best off holding mostly equities.  While the dividends that equities would return are less than the interest you would get in peer-to-peer lending, over long periods of time not only do you get the dividends from equity investment but the value of the stock will grow faster than  interest on loans. The higher returns from stocks, however, comes with more risk of big downturns.  Many people pull their investments out of stocks right after crashes which really hurts their long term returns.  So, in order to get the benefit of investing in stocks you need to be strong enough to continue to hold the stocks through the crash and into the recovery. As for which stocks to invest in, generally it is best to invest in low-fee index funds/etfs where you own a broad collection of stocks so that if (when) any one stock goes bust that your portfolio does not take much damage.  Try to own both international and domestic stocks to get good diversification.  The consensus recommends adding just a little bit of REITs and bonds to your investments, but for someone at 25 it might not be worth it yet. Warren Buffett had some good thoughts on index investing.
:) 2) The Time Value of Money A promise to pay you $500 tomorrow costs less than $500 today A fixed annuity promises to pay you a certain amount of money each year. This can be represented as a rate of return calculated based on how much you have to pay to get that annual payment, but it is important to remember that the first payment will be worth substantially more in real purchasing power than the last payment you get. The longer you live, the less your fixed payment is worth in real terms due to inflation! In short, the rate of return has to be discounted for inflation, it is not a ""real"" rate of return. In other words, if you give me $500 today and I promise to pay you $100 for the next 5 years, I am making money not only because I can invest the money between now and then, but also because $100 will be worth less five years from now than it is today. With annuities, if you want your payment to rise in step with inflation, you have to pay more for that (a LOT more!). These are the two main reasons - here are a few smaller ones: 3) A very long Time Horizon If the stock market or another asset class is performing well/poorly, the issuer can often afford to wait much longer to buy or sell than an individual, and can take better advantage of historical highs and lows over the long term. 4) ""Big Boy"" investing A large, financially sound issuer can afford to take risks that an individual cannot, such as in very large or illiquid assets, such as a private company (a la Warren Buffet). 5) Efficiencies of scale Institutional investors have a number of legal advantages over individuals, which I won't discuss in detail here. However, they exist. Large issuers are also often in related business (insurance, mutual funds) such that they can deal in large volumes and form an internal clearinghouse (i.e. if I want to buy Facebook and you want to sell it, they can just move the stock around without doing any trading), with the result that their costs of trading are lower than those of an individual. Hope that helps!"
"Most markets around the world have been downtrending for the last 6 to 10 months. The definition of a downtrend is lower lows and lower highs, and until you get a higher low and confirmation with a higher high the downtrend will continue. If you look at the weekly charts of most indexes you can determine the longer term trend. If you are more concerned with the medium term trend then you could look at the daily charts. So if your objective is to try and buy individual stocks and try to make some medium to short term profits from them I would start by first looking at the daily charts of the index your stock belongs to. Only buy when the intermediate trend of the market is moving up (higher highs and higher lows).  You can do some brief analysis on the stocks your interested in buying, and two things I would add to the short list in your question would be to check if earnings are increasing year after year. The second thing to look at would be to check if the earnings yield is greater than the dividend yield, that way you know that dividends are being paid out from current earnings and not from previous earning or from borrowings. You could then check the daily charts of these individual stocks and make sure they are uptrending also. Buy uptrending stocks in an uptrending market. Before you buy anything write up a trading plan and develop your trading rules. For example if price breaks through the resistance line of a previous high you will buy at the open of the next day. Have your money management and risk management rules in place and stick to your plan. You can also do some backtesting or paper trading to check the validity of your strategy. A good book to read on money and risk management is - ""Trade your way to Financial Freedom"" by Van Tharp. Your aim should not be to get a winner on every trade but to let your winners run and keep your losses small."
DCA is not 10%/day over 10 days. If I read the objective correctly, I'd suggest about a 5 year plan. It's difficult to avoid the issue of market timing. And any observation I'd make about the relative valuation of the market would be opinion. By this I mean, some are saying that PE/10 which Nobel prize winner Robert Schiller made well known, if not popular, shows we are pretty high. Others are suggesting the current PE is appropriate given the near zero rate of borrowing.  Your income puts long term gains at zero under current tax code. Short term are at your marginal rate.  I would caution not to let the tax tail wag the investing dog. The fellow that makes too many buy/sell decisions based on his taxes is likely to lag he who followed his overall allocation goals.
"Fool's 13 steps to invest is a good starting point. Specifically, IFF all your credit cards are paid, and you made sure you've got no outstanding liabilities (that also accrues interest), stock indexes might be a good place for 5-10 years timeframes. For grad school, I'd probably look into cash ISA (or local equivalent thereof) -the rate of return is going to be lower, but having it in a separate account at least makes it mentally ""out of sight - out of mind"", so you can make sure the money's there WHEN you need it."
"The emphasis of ""stop loss"" is ""stop"", not ""loss"". Stop and long term are contradictory. After you stop, what are you going to do with your cash? Since it's long term, you still have 5+ years to before you use the money, do you simply park everything in 0.5% savings account? On the other hand, if your investment holds N stocks and one has dropped a lot, you are free to switch to another one. This is just an investment strategy and you are still in the market."
You've got the right idea, except that the stated interest rate is normalized for a 1-year investment.  Hence if you buy a 4-week bill, you're getting something closer to 4/52 of what you've computed in your question.  More precisely, the Treasury uses a 360 day year for these calculations, so you multiply the stated rate by (number of days until maturity)/360 to get the actual rate of return.
"This is the same answer as for your other question, but you can easily do this yourself: ( initial adjusted close / final adjusted close ) ^ ( 1 / ( # of years sampled) ) Note: ""# of years sampled"" can be a fraction, so the one week # of years sampled would be 1/52. Crazy to say, but yahoo finance is better at quick, easy, and free data.  Just pick a security, go to historical prices, and use the ""adjusted close"". money.msn's best at presenting finances quick, easy, and cheap."
"For free, 5 years is somewhat available, and 10 years is available to a limited extent on money.msn.com. Some are calculated for you. Gurufocus is also a treasure trove of value statistics that do in fact reach back 10 years. From the Gurufocus site, the historical P/E can be calculated by dividing their figure for ""Earnings per Share"" by the share price at the time.  It looks like their EPS figure is split adjusted, so you'll have to use the split adjusted share price. ""Free cash"", defined in the comments as money held at the end of the year, can be found on the balance sheet as ""Cash, Cash Equivalents, Marketable Securities""; however, the more common term is ""free cash flow"", and its growth rate can be found at the top of the gurufocus financials page."