Uhm... now you're just curve fitting, to your opinion... what about the Japanese that invested in 1950? Or what if you started in 2003 or 2010?
you call an awfull 25 years curve fitting ? ? ? that's putting things on their head ... and it hasn't even reached break even by a mile ... it's just a bad idea as a strategy especially with the S&P500 being far from cheap if you look at fundamentals you might consider using other kinds of strategies that are somewhat more flexible BTW: I wasn't invested in Japan at that time but I was a retail invester with money in European stocks and remember that Japan was some kind of hype as 'the promised land with the economic miracle' I am 51 and with a little luck should live to see another 30 years statisticallly speaking
Buy and hold is good for income only. As a trading strategy, it comes with no risk management except let time work it out. Potentially, this means a risk of 100% over a holding time-frame of a life-time. OK, if you want to hold something for dividends and let your executors sell the assets at a loss after you die, that's fine and makes financial sense if you have no heirs. But otherwise its delusional.
There is nothing wrong with buying the S & P outright via the spyder or one of the low cost commission free etfs and holding it long term. It might not be right for the trading part of your portfolio, but you will outperform over 75% of the fund managers holding US names. It's extremely tax efficient and it it looks like mutual funds will not be subject to dating rule - although the tax proposal may not end up in the final law. It cheap and efficient and as many have pointed out boring. Many hedgefunds use it as a core holding for exposure to the US, most e commerce brokers have a low cost no-commission clone.
Better tax treatment. Fewer transaction costs. In fact buying ES for buy and hold is profoundly stupid.
Don't see why...you tie up so much more capital holding SPY than buying ES contracts. Maybe 10x as much. The risk reward profile is pretty much the same. The cost of rolling over every quarter is miniscule. In fact you could just buy 6 month out futures and roll over twice a year. Maybe there are big tax differentials between the two in the US, I don't know.
There is tax differential in US. ES is subjected to 1256 contract rules, so taxed 60% long and 40% short term gains taxes, where as SP500 ETF if held for a year (typical buy&hold) then it is taxed at 100% long term gains rate. Based on their tax rate, it could be big difference. Even other-wise, it does not make sense to buy&hold ES over SP500 ETF * SP500 etf can be bought commission free in most brokerage houses and it costs 3-4 basis points. (IVV is 4bp and SCHK is 3bp) * SP500 etf can be invested regularly when ever they get pay checks, ES investment is lumpy * SP500 etf buying can be set and forget (most brokerage houses allow automatic buying in some fixed dates), where as ES has to be rolled quarterly based on optimal dates and times * Buying ES and keeping rest in cash is not same as buying SP500 ETF. In ES you are paying implicit interest and you are not getting any returns in cash. One could mitigate this by buying Treasury bill ETF. Then they could as well buy SP500 etf. Bills have other problem like paying ordinary income tax which is taxed at higher rate. Implicit interest cost can not be deducted, but one has to pay higher ordinary income tax for interest received thru' treasury bill etf. It is double whammy. Only disadvantage SP500 ETF has over ES is dividends. Dividends are taxed at higher rate, but SPY dividends are only 2%. These dividends can be sweeped quarterly to reinvest in ETF if desired or they can buy Muni bond ETF which mitigates tax concerns.
The tax advantages are even greater if you intend to hold for many years. Imagine if you paid 20percent of your gains each year over the last 5 years, how much worse would you do? You can esssentially never pay taxes on spy if you hold all the way till you die and then gift to your children.