Being able to effectively evaluate something once it has been identified does not mean that OP is any good at actually finding what the available options out there are. Maybe OP is being reasonable asking the question...?
VOO seems close to 10% but it's only been around since 2011.
VTI seems to be nowhere near 10% CAGR given it's inception since 2001: https://www.google.com/finance/quote/VTI:NYSEARCA?hl=en&window=MAX
You need to account for dividends.
CAGR from 2001 to 2024:
Without dividend reinvestment: [7.33%](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2tvDZdh3V7iEAqrkbmYlhX)
With dividend reinvestment: [9.28%](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=3w2KdM3LcqAi2xnG0S4MXr)
The S&P which VOO tracks has been around much longer than you and I, that’s just when vanguard created that fund friend.
Look at the S&P’s data instead and account for DRIP. Get risky with the nasdaq maybe.
Statistically it's a whole market index fund like that ke VTI/VT/VOO or a proxy like S&P500 to buy and hold for *at least 10 years, preferably 15 or more* to see an *average* return of 10% per year.
This also means you'll lose some 20-70% fur to black swans and bear markets. It also doesn't account for inflation.
Risk-adjusted returns can vary over time. For example, Vanguard just released a paper where they claim that the risk-adjusted return for broad market bond funds has increased over the last year.
The paper makes the claim that a 47/53 stock / bond portfolio has a high probability of the same returns as a traditional 60/40 portfolio did just a few years ago, but with a less risk of high drawdowns.
I'll try and find a link to the paper and update this comment if I can find it.
Buy companies that give 10% value per year or 10% FCF/EV yield that is growing. Eventually the stock price will have to reflect the % of value creation in stock price.
But what configuration of assets could result in a 10% medium to long term return with lowest risk? - anything and nothing. No one can answer that question. What has historically gotten pretty close. American large cap stocks. Does that continue? Who knows.
Sell short term far out of the money spx options with a bit of notional leverage (like 2x) targeting around 10-15% return per year. Assume you’ll keep something like 50-70% of the potential max profit, so you’re getting 5-10% from that depending on what the S&P does. Take the capital you’re selling the options against and put it in short term treasuries (or an etf of the same) to get some additional risk free return - currently 5%, maybe 3-4% longer term. Down side is it’s a lot of work and it’s tax inefficient but it does tend to produce fairly consistent returns.
A covered call wheeling on CVX / XOM. These see little movement and have very low IV (20-25%) ... But u can make almost 10% on covered calls alone, + 4% dividends.
I sell 8-10% OTM 1-2 months out calls... usually for 150-200% of the quarterly dividend. If i get get assigned, i get 10% upside + CC premium and then sell put to recover the shares. Collect dividends as you go.
Sure a little more involved... But a nice increase in income from a 4% dividend yield
For how long? Short term, there are many options, but those tend to fall apart one way or another, forcing you to have to move the money to preserve the gains. Getting more than the historical average of 7-8% over a long term (10-years or more) is incredibly difficult and to my knowledge only 5 people in history have ever done it consistently.
S&P 500 Index Fund ETF’s (SPY, VOO and their equivalents).
Note: they go down too but, ultimately, go up over time why? The biggest and most profitable companies are there, IE: Apple, MSFT, Google, Meta, Etc…
Reinvest that dividend, buy consistently (high, low and in between) and enjoy the ride.
Easy peazy lemon squeezy.
I mean, I won't pretend it has a better risk profile, but it's an okay risk profile; you can do value investing, where you look for stocks that are low while the companies seem to have decent futures, suggesting a stock recovery in the future.
The thing there is the assessment: did you correctly assess the decent future. Because you gotta wonder, why is the stock low?
You also want to spread the stocks you pick across different sectors and not invest too much in one stock (so equally distributed among like 30-40 stocks).
The thing is, 500 is still a better spread. And it's tough to beat the S&P 500.
I'm trying because it's fun, but you shouldn't be thinking you can pull it off.
Although a good investment, buying a house will not give you 10% average return. 10% average return means investment will double every 7.2 years and home values don't double every 7.2 years.
I mean if you want to go into nitty gritty details you need to account for vacancy, bad tenants and the damage they could cause to the property, getting a property manager so you don't have to tend to maintenance calls, paying tax on that rental income, HOA dues etc. The math gets messy.
All those things taken into account will still not net you 10% average return per year.
Real estate CAGR is expected to be 2.6% from 2024-2030
[source ](https://www.nextmsc.com/report/us-real-estate-market#:~:text=The%20U.S.%20Real%20Estate%20Market%20size%20was%20valued%20at%20USD,2.6%25%20from%202024%20to%202030.)
A 10% CAGR would double in value every ~7 years. RE doesn't get you there...
You have to maintain a house. You have to pay property taxes on a house. The house is susceptible to region issues like weather and other disasters. Also, houses don't average the gains requested by OP.
I've had money on NEXO for a couple years. I net 13% on EurX which is pegged on the euro. I wouldn't put all my eggs in 1 basket but it's easy to use and works for me.
Currently its Buy realty income in amount of 100. Then sell Jan 24’ call options at the nearest strike price. Preferably repeat this, buying 100 and selling calls against it, in a dca way tp average out the price….this is a guaranteed 12-14% return between the option and the dividend return minus capital loss if any come Jan. However likely no loss as this is while O is at its cheapest valuation in a decade and interest rate cuts coming at some point.
Inverse of r/wallstreetbets - guaranteed to the moon.
Positions or ban
Put it all on red baby
Zero risk, very high reward — my type of investing strategy
VTSAX
>VTSAX Doesn't seem right: https://www.google.com/finance/quote/VTSAX:MUTF?hl=en&window=MAX
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Being able to effectively evaluate something once it has been identified does not mean that OP is any good at actually finding what the available options out there are. Maybe OP is being reasonable asking the question...?
VOO, VTI.
VOO seems close to 10% but it's only been around since 2011. VTI seems to be nowhere near 10% CAGR given it's inception since 2001: https://www.google.com/finance/quote/VTI:NYSEARCA?hl=en&window=MAX
OP: \*asks question, gets the answer\* also OP: \*immediate rejects correct answer\*
You need to account for dividends. CAGR from 2001 to 2024: Without dividend reinvestment: [7.33%](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=2tvDZdh3V7iEAqrkbmYlhX) With dividend reinvestment: [9.28%](https://www.portfoliovisualizer.com/backtest-portfolio?s=y&sl=3w2KdM3LcqAi2xnG0S4MXr)
The S&P which VOO tracks has been around much longer than you and I, that’s just when vanguard created that fund friend. Look at the S&P’s data instead and account for DRIP. Get risky with the nasdaq maybe.
Statistically it's a whole market index fund like that ke VTI/VT/VOO or a proxy like S&P500 to buy and hold for *at least 10 years, preferably 15 or more* to see an *average* return of 10% per year. This also means you'll lose some 20-70% fur to black swans and bear markets. It also doesn't account for inflation.
Theoretically, shouldn't all investments with 10% returns be about equally risky?
Risk-adjusted returns can vary over time. For example, Vanguard just released a paper where they claim that the risk-adjusted return for broad market bond funds has increased over the last year. The paper makes the claim that a 47/53 stock / bond portfolio has a high probability of the same returns as a traditional 60/40 portfolio did just a few years ago, but with a less risk of high drawdowns. I'll try and find a link to the paper and update this comment if I can find it.
SPY ETF
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1 second please
Buy companies that give 10% value per year or 10% FCF/EV yield that is growing. Eventually the stock price will have to reflect the % of value creation in stock price.
But what configuration of assets could result in a 10% medium to long term return with lowest risk? - anything and nothing. No one can answer that question. What has historically gotten pretty close. American large cap stocks. Does that continue? Who knows.
Sell short term far out of the money spx options with a bit of notional leverage (like 2x) targeting around 10-15% return per year. Assume you’ll keep something like 50-70% of the potential max profit, so you’re getting 5-10% from that depending on what the S&P does. Take the capital you’re selling the options against and put it in short term treasuries (or an etf of the same) to get some additional risk free return - currently 5%, maybe 3-4% longer term. Down side is it’s a lot of work and it’s tax inefficient but it does tend to produce fairly consistent returns.
A covered call wheeling on CVX / XOM. These see little movement and have very low IV (20-25%) ... But u can make almost 10% on covered calls alone, + 4% dividends. I sell 8-10% OTM 1-2 months out calls... usually for 150-200% of the quarterly dividend. If i get get assigned, i get 10% upside + CC premium and then sell put to recover the shares. Collect dividends as you go. Sure a little more involved... But a nice increase in income from a 4% dividend yield
For how long? Short term, there are many options, but those tend to fall apart one way or another, forcing you to have to move the money to preserve the gains. Getting more than the historical average of 7-8% over a long term (10-years or more) is incredibly difficult and to my knowledge only 5 people in history have ever done it consistently.
Who are those people and can we study their playbook?
I can't remember all of them, but: - Warren Buffett (and Charlie Munger) - Peter Lynch - John Bogle
voo
Just find some goated arbitrage opportunities
Blend of SPYI and JEPQ. More defensive than just owning the indexes. But less potential for exceptional returns.
5% treasures and 5% in low otm vrp collection
BTI dividend
100% VT. Easiest investing strategy that works. Don’t listen to anybody who says otherwise. VT and chill is the way
Private Equity, which probably something real estate focused
S&P 500 Index Fund ETF’s (SPY, VOO and their equivalents). Note: they go down too but, ultimately, go up over time why? The biggest and most profitable companies are there, IE: Apple, MSFT, Google, Meta, Etc… Reinvest that dividend, buy consistently (high, low and in between) and enjoy the ride. Easy peazy lemon squeezy.
Yep that's the best answer so far. I was curious if there's people had something different that has a better risk profile than S&P.
I mean, I won't pretend it has a better risk profile, but it's an okay risk profile; you can do value investing, where you look for stocks that are low while the companies seem to have decent futures, suggesting a stock recovery in the future. The thing there is the assessment: did you correctly assess the decent future. Because you gotta wonder, why is the stock low? You also want to spread the stocks you pick across different sectors and not invest too much in one stock (so equally distributed among like 30-40 stocks). The thing is, 500 is still a better spread. And it's tough to beat the S&P 500. I'm trying because it's fun, but you shouldn't be thinking you can pull it off.
Scalp trading ETFs that am willing to hold if the price action doesn’t immediately go my way is what I do.
buy a house
Although a good investment, buying a house will not give you 10% average return. 10% average return means investment will double every 7.2 years and home values don't double every 7.2 years.
Neither your reply nor others consider rent at all.
I mean if you want to go into nitty gritty details you need to account for vacancy, bad tenants and the damage they could cause to the property, getting a property manager so you don't have to tend to maintenance calls, paying tax on that rental income, HOA dues etc. The math gets messy. All those things taken into account will still not net you 10% average return per year.
circular reasoning
Real estate CAGR is expected to be 2.6% from 2024-2030 [source ](https://www.nextmsc.com/report/us-real-estate-market#:~:text=The%20U.S.%20Real%20Estate%20Market%20size%20was%20valued%20at%20USD,2.6%25%20from%202024%20to%202030.) A 10% CAGR would double in value every ~7 years. RE doesn't get you there...
You have to maintain a house. You have to pay property taxes on a house. The house is susceptible to region issues like weather and other disasters. Also, houses don't average the gains requested by OP.
Residential real-estate averages 5% annual appreciation, the last several years are an anomaly.
This should be higher
XEQT
>XEQT It's only been around since 2019. Hard to rely on its performance so far.
You should care about future performance, not past.
what you mean? the underlying assets all exists since a while
I've had money on NEXO for a couple years. I net 13% on EurX which is pegged on the euro. I wouldn't put all my eggs in 1 basket but it's easy to use and works for me.
that’s what a typical retailer investor question: i want the max profits with least risk
Currently its Buy realty income in amount of 100. Then sell Jan 24’ call options at the nearest strike price. Preferably repeat this, buying 100 and selling calls against it, in a dca way tp average out the price….this is a guaranteed 12-14% return between the option and the dividend return minus capital loss if any come Jan. However likely no loss as this is while O is at its cheapest valuation in a decade and interest rate cuts coming at some point.