Will the S&P 500 grow any more? Surely it has reached its peak and max potential.

I often write on Quora.com, where I am the most viewed writer on financial matters, with over 353.9 million views in recent years.

In the answers below I focused on the following topics and issues:

  • Will the S&P 500 grow any more? Surely it has reached its peak and max potential.
  • What are the best places to live between the UK, US, Australia and Canada.
  • Has showing off really became more common?

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Source for all answers – Adam Fayed’s Quora page.

Will the S&P 500 grow any more? Surely it has reached its peak and max potential.

One of the first people I ever met who got wealthy slowly from investing made an interesting admission to me.

He admitted that he would never have invested had he known that he was investing at record highs.

He now knows, of course, that that would have been a foolish decision because markets regularly hit highs as shown by this

What is more, the link above only shows records in terms of capital values.

Adjusted for dividend reinvestment, markets have hit record highs many more times than this.

Dividends are a very important component of stock market growth. The S&P500 has done 11.491% per year, on average, since 1945, or 7.577% after inflation.

The returns would have fallen to 7.888% and 4.101% respectively, had that investor not reinvested dividends.

Despite this, the media don’t focus on dividends, and how they have also contributed to the returns of other markets.

A great example of this is the Japanese Nikkei. We keep being told that it is the only major stock market that hasn’t hit record highs, and therefore people who invested at the peak would have lost money.

The reality is that it hasn’t hit record highs in capital values for thirty years, but somebody who reinvested dividends would actually be up as shown by this calculator:

Anyway, getting back to the topic, stock markets have been going up for hundreds of years and there is no maximum for markets.

There is a simple reason why stock markets, but not all individual stocks, tend to rise long-term.

That is the social Darwinism that exists. Some of the strongest companies of today, like Netflix, Amazon Facebook, didn’t even exist thirty years ago.

They knocked off several underperforming stocks from the index. Likewise, with all the innovation that is going on, the stocks on the market in 2050 will no doubt be using technology that makes today’s winners look outdated.

The only time markets will ever stay stagnant for decades and never recover, is if there is no new innovation that makes business more profitable and efficient.

Between the countries of the USA, UK, Canada and Australia, which is the best to live in?

That is very subjective of course, but let’s make the assumption that you are an expat and not local.

If so, the United States is probably the best if you are in the following fields:

  • Technology. I know several people who moved to the US in this field and within days or weeks of changing their LinkedIn profile, they get internal headhunters from Google, Facebook and beyond trying to poach them now they are living locally and have the visa
  • Very high-end and niche areas like medicine. A top doctor, academic, or many other professions will pay more at the higher level

Conversely, at the lower and even mid-level, you might find that you do better in Australia, the UK and Canada.

That is because healthcare is usually free at the point of use and the cost of living these days is actually lower than the US, at least if you compare like-for-like – New York is more expensive than London as an example:

Cost of Living Comparison Between

What is more, you also have fewer hassles when it comes to taxes and healthcare.

In terms of lifestyle, London is the place to be if you want a high-paced lifestyle:

The UK is also the place to be if you want to travel more easily. You can travel cheaply to almost all of Europe’s fifty-odd countries + a few places in North Africa within a 4.5-hour plane journey, and get to the Middle East in 5–7 hours.

Australia, New Zealand, Canada, and some of the quieter parts of the UK are better if you want a quieter life, say if you have a family.

If you are a remote worker or somebody who is in an industry where you can live and work almost anywhere, like an NGO member of staff or in oil&gas, I would consider other places.

There are plenty of places that are expat-friendly which have no income taxes or lower costs.

Most expat satisfaction surveys show that the likes of Singapore, Malaysia, and Mexico do very well.

Why has showing off became a very common human behaviour nowadays?

I am not sure it is anything new and that is it getting stronger.

Sure, social media is new, and that has attracted some vulgar content, but the act of showing off isn’t.

What is more, we are also seeing the opposite of this trend towards showing off in some countries.

Namely, inverse snobbery exists, where people not only avoid showing off but don’t do anything which might appear to indicate that you are doing this.

I was watching a documentary on Dubai a few days ago, where it was discussing some of the differences between the UAE and the West.

The show attracted a lot of criticism for only showing one or two sides of expat life.

However, it also received criticism from many people in the UK and beyond as shown by the article below – where some of the inverse snobbery can be seen in the comments.

What was interesting about the show was a comment that one of the British people living in Dubai made.

She said that she isn’t sure why the place gets so much bad PR, but perhaps it is due to the fact that in the UK “even billionaires tend to go to Marks & Spencer”, whereas Dubai is loud, brash, and sometimes vulgar.

There was also a clip on the show of a Danish man who said if he drove his luxury car in Europe, he would probably be beaten up, rather than admired.

Of course, not all of these comments should be taken literally, but the broader points hold true.

In newly rich places, many wealthy people show off. In places that have gotten used to wealth, it is often the opposite.

In many countries which have been developed for three generations or more, some lower-income people are more likely to buy luxury goods than very wealthy ones.

In such places, ironically, being careful with money can be something to show off about.

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Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 461.9 million answers views on Quora.com and a widely sold book on Amazon

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