Many people may have heard of it. Buffett once publicly set a "ten-year bet": starting from 2008, any fund manager can choose at least 5 active funds. If the overall performance of fund defeats S&P 500 index fund 10 years later, the other party will win the bet. In the end, only one fund manager, Ted Seides, dared to take on the bet. By the end of 2016, the average annualized return of the funds selected by Ted was only 2.2%, while the S&P 500 Index Fund achieved an annualized return of 7.1%, far ahead. In early 2017, Ted announced that he would give in early.
In the past century, or at present, countless investors have tried their best to defeat the market through various efforts and pursue a return level that exceeds the average market, but in fact this is not easy.
The " efficient market " hypothesis proposed by Eugene Fama shows a very simple truth: the market is composed of investors, so the performance of all investors cannot be better than the market. Some people surpass the market, and some people will definitely be defeated by the market. Especially for ordinary investors who lack professional knowledge and time and energy, it is even more difficult to defeat the market.
At the 2021 shareholders' meeting, Buffett tried to list all the car companies that started with "M" in 1900, but the list is very long, and it is a full page just starting with "Ma". By 2009, only a handful of these companies survived. He warned investors that few, few, and few can choose winners, and investment is not as easy as it sounds.
Moreover, in the market, various voices make it difficult for people to remain rational all the time. In the repeated speculative frenzy, there are many irrational investment behaviors such as following the trend and chasing the rise. I originally wanted to defeat the market, but I regretted it.
But in fact, beating the market and making money are two different things. Is there any simple way to enable everyone to obtain the average market return level and earn pretty good long-term returns? One of the easiest and most effective ways to
is to invest in the market itself. The index that people often talk about actually reflects the overall trend of the market. Therefore, as a simple and convenient investment tool, index funds can help investors obtain overall market returns, so that wealth growth can keep up with or even exceed the speed of national economic development .
According to statistics from E Fund Index, in the 1992 years from 1930 to 2021, the average annual rate of return of the S&P 500 index reached 9.7%, higher than the average annual growth rate of US nominal GDP of 6.1% during the same period. Looking at the domestic market, if we bought the CSI full index, CSI 300, CSI 2 CSI 500 and CSI 1000 index in early 2006, and held it for the next 16 years, we can get an average annual return of 14.2%, 13.0%, 15.3% and 15.7% respectively, which all exceeded the average annual growth rate of China's nominal GDP during the same period.
From the above examples, we can find that investing in these representative broad-based indexes can obtain long-term GDP+ returns, and take the train of national economic and wealth growth in a simple way to achieve asset preservation and appreciation.
The days are very long and you need to pass slowly; the road to investment is more than a hundred steps, so you might as well look at the long term. Life and investment can be changed to a simpler way. Good night on E Fund Index.
Note:
1. Index income calculations take into account dividend reinvestment returns and use the full income index for calculation. The full return data of S&P 500 comes from Bloomberg, with a statistical range of 1930/1/1-2021/12/31, and the full return data of CSI All Index, CSI 300, CSI 500 and CSI 1000 indexes comes from Wind, with a statistical range of 2006/1/1-2021/12/31;
2, the average annual growth rate of US GDP nominal GDP = (nominal GDP at the end of 2021/nominal GDP at the end of 1929)^ (1/92)-1= (US$23315.1 billion/US$104.6 billion)^ (1/92)-1=6.1%, and the data comes from BEA.
Planning: Ding Jianming Yu Zhe
Copywriting: Yang Wanyu
Anchor: Liu Yingjie
Editor: Zhang Nan Yu Hongbo
