#1. Don’t Wait for a Correction A person who invested $100 in the S&P 500 in 1960 and never sold would now have $43,132. An investor who employed a “buy the dips” strategy of buying in 1960, selling at new all-time highs, and waiting for a 10% correction before buying back, would have just $534. #2. How the Mighty Have Fallen In September 2000, General Electric was the world’s largest company, valued at almost $600 billion. Now, 21 years later, its value is $113 billion, about an 80% drop. What we’d always hear back then: “Just put your money in …
Do Downturns Lead to Down Years?
See for yourself… US Market is represented by the Russell 3000 Index There’s always a drop coming. We don’t know when or by how much. But it’s coming…just like the next Tom Brady Super Bowl victory. What’s more important is the overall effect on our behavior of these yearly drops. Many people get spooked and sell, understandably. It can be scary. But it shouldn’t be surprising. What may be surprising is the resiliency. Every year, a drop. Yet 16 out of 20 led to a positive return for the year. Would you have guessed that? Drops are short term. Resiliency …
Patience in Investing: 2021 Update
The market is strange, isn’t it? Covid hits. The human toll is heart-breaking. The economic toll is gut-wrenching. And then there’s the market. A dramatic fall beginning on February 20th of last year in response to the pandemic screeched to a halt just a month later, bottoming out on March 23rd. We haven’t looked back since, rocketing past pre-Covid levels to all new highs. At the bottom, nothing was yet better in the world, and it seemed like it never would be. Nonetheless, up went the market. Did you stay put? This is the 5th edition of this chart, and …
Frequently “Oaked” Questions
You Asked, So We’ll Answer FOQ: Why do I keep hearing about “SPACs”? Short: When celebrities like Shaquille O’Neill and Serena Williams get involved in an investment, it makes headlines. Long: It’s a new craze that’s getting a lot of attention. They were invented in the ‘90s, but recently, this happened: FOQ: So what is a SPAC? Short: Special Purpose Acquisition Company Long: They are “blank check” companies with no operating history, where the founders raise money from investors with the hope of one day finding another company to buy with that money. If a traditional IPO is a …