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They say the days are long but the years fly by.
Having said that, here’s a statistic from Ben Carlson:
“From 1928–2017, the S&P 500 showed an annualized average return of roughly 9.6% per year.
From 2009–2017, the S&P 500 showed an annualized average return of roughly 15.1% per year.
One of these data points is unsustainable (okay maybe both).
The S&P 500 would have to go nowhere for the next 5 years to bring the 2009 returns into alignment with the long-term averages. So if the S&P saw 0% total returns beginning at the start of this year, the 14-year annualized return number from 2009–2022 would be 9.5%, right around that really long-term average number.
Of course, there’s nothing that says these long-term averages are written in stone or that we have to get back to those averages within a certain time frame. I’m simply trying to show how powerful this bull market has been.”
You: Okay, so how should I invest?
Here’s Cullen Roche:
“Good investing is just like successful dieting. You don’t need to discover some holy grail of dieting. You just need a plan that will instill discipline in you so that you stick with it. That’s the only diet that works and it’s the only investment strategy that works.”
You: All right, but what strategy (or strategies) should I try out?
Here’s Josh Brown:
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“Two ways — the first way is to buy what you believe to be good stocks and hold them for a really long time. The good ones will go up enough so that the bad ones don’t hurt much. And the bad ones have a chance to eventually become good as the people who run the companies figure out what they need to fix. That’s how Warren Buffett, the best investor ever, has done it. It’s simple, but it’s not easy.
The second way is harder to do. You have to figure out something before everyone else does, or find something that everyone is getting wrong about a company. For example, when a company is going through a difficult time, its price falls because other investors give up on it or assume a problem will last forever. If you figure out that the problem can be solved, you have an opportunity to invest.”
You: Great, so there’s absolutely no way that I will lose money if I following this advice, right?
Here’s Josh again:
“If there were ironclad rules, we would all be following them.
If there were inter-market relationships we could set our watches by, everyone would always know what time it was.
If there were immutable formulas, we’d all have adopted them a long time ago.
If there were an answer, we’d have all had the whisper of it imprinted on our very souls.
If there were a shortcut or a cheat code, every little boy and girl would have grown up knowing it.
But there are not.”
There are no shortcuts.
Good luck!
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