Many investors can benefit from owning equities over a long period of time. However, equity investing is not suitable for everyone. Some of us may not have the temperament to own stocks. Others may have enough saved and don’t need the potential increased return equities have historically offered vs fixed income assets. Wisdom can be simple, yet profound. Davis Advisors has put together a collection of quotes and lessons from some of the world’s great investors. Below are some of the timeless ideas:
Don’t Attempt to Time the Market: “Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” – Peter Lynch, Legendary Investor at Fidelity
A $10,000 investment in the S&P 500 over the past 20 years (ending 12/31/18) would have resulted in an ending balance of $6,213 if you missed the 30 best days. If you stayed invested the entire time (and didn’t attempt to avoid downturns), the ending balance was $29,843.
Think Long-Term and Be Patient: “The stock market is a device to transfer money from the ‘impatient’ to the ‘patient’.” – Warren Buffet, Chairman, Berkshire Hathaway
Markets are volatile. Stay the Course: “Individuals who cannot master their emotions are ill-suited to profit from the investment process.” – Benjamin Graham, Father of Value Investing
A $10,000 investment in the S&P 500 from 1984 – 2018 would have resulted in $351,892. It is important to remain patient and unemotional to benefit from owing equities.
Invest Regularly: “Systematic Investing will pay off ultimately, provided that it is adhered to conscientiously and courageously under all market conditions.” – Benjamin Graham, Father of Value Investing
Equities Have Built Wealth despite Crisis: “History provides crucial insight regarding market crises: they are inevitable, painful and ultimately surmountable.”- Shelby M.C. Davis, Legendary Investor at Davis
Most decades have major challenges. Going back to the 1970’s, those challenges have included a massive bear market in 1973 – 1974, Black Monday in the 1980s, the tech bubble and ensuing collapse in the 1990s and early 2000s and most recently the financial crisis. Yet, owning stocks continued to benefit investors. A $10,000 investment in the S&P 500 from 1970 – 2018 would have resulted in an ending balance of $1,169,122. Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… pays it. “
It’s important to talk with your advisor to see if owning stocks is appropriate for you. Your portfolio allocation is a critical part of your overall financial plan. While it is difficult, it’s important not to get caught up in the short-term volatility or the media noise. Staying disciplined in times of uncertainty is critical to being a successful investor and achieving your goals. If you have any questions, please give Garry a call at 858-450-9711 or email him at garry@kachkovskyandfisher.com.
If you have any questions, please give Garry a call at 858-450-9711 or email him at garry@kachkovskyandfisher.com.
Note: The S&P 500 is an un-managed index of 500 widely held stocks that’s generally considered representative of the U.S. stock market.
Sources: Davis Advisors
Post sponsored by Certified Financial Planner (CFP) Garry Kachkovsky. If you have questions regarding financial planning or investment management, give Garry a call at 858-450-9711 or email at garry@kachkovskyandfisher.com. For more information, visit http://www.kachkovskyandfisher.com/
Kachkovsky & Fisher is a Registered Investment Advisory Firm. This information is general in nature, is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security. Investments and strategies mentioned may not be suitable for all investors. Past performance may not be indicative of future results. Investors should consider the investment objectives, risks, charges and expenses associated with savings plans before investing.
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Kachkovsky & Fisher is a Registered Investment Advisory Firm. This information is general in nature, is not a complete statement of all information necessary for making an investment decision, and is not a recommendation or a solicitation to buy or sell any security. Investments and strategies mentioned may not be suitable for all investors. Past performance may not be indicative of future results. Investors should consider the investment objectives, risks, charges and expenses associated with savings plans before investing.
