Jul 10, 2022
As far as stocks are concerned, yes I think so. While the S&P 500 Index is down approximately 15% YTD, many stocks saw anywhere from 30-80% drawdowns. Now one would think selling does not make much sense. Perhaps the inverse of selling is the answer. Why not wait 10 or 20 years and see where the market lies? You can also do nothing and build your cash pile, maybe a smart move in this environment.
I'm not calling a bottom. Stock valuations are unpredictable and since the trend is down, prices might go lower. My bets are placed that we're nearing worst case scenario territory at the moment. Disease, war and inflation have given a much needed haircut to the frothy stock prices of 2021. Here's hoping to better scenarios ahead.
Jul 09, 2022
It's hard to imagine what life could look like in 30 years. We short-sightedly see chaos in our world, and the markets start wavering. I won't tell you what to do now. One lesson of Benjamin Graham's Intelligent Investor is that predicting the markets is futile.
A perspective beyond this current slot of time with assets steadily growing is possible. Index funds all but guarantee it. However, if you bought index funds at the beginning of 2022, you lost approximately 15%. Worst 1st half in the stock market since 1970! That's tough, but don't worry. In 10, 20, or 30 years all will be fine. Keep the longview.
Apr 20, 2022
I received a "C" in my only college finance class. I just wasn't that interested in a subject that mostly flew over my head at age 20.
The class consisted of watching video lectures from a reasonable, jolly Finance professor. I failed to absorb most of the lessons, grasping only enough to not get decimated by the course's mid-term and final exam.
One lesson stood out from my professor, who seemed to know his field... "Buy and Hold". Nothing revolutionary but it was the first time someone had introduced me to this simple philosophy.
Owning and hanging onto a stock usually outperforms other more short-sighted investing or trading schemes. It stuck with me. While I have my share of bad investments, the philosophy holds weight and guided me towards some profitable ideas. I continue to hold my highest conviction securities and hold small positions if I am less sure about the company.
A solid investment held on a 5, 10 or 30 year investment horizon will probably appreciate in value. Historically, this is true for many stocks. However, Graham knew investment returns may be extremely unpredictable in sure times and increasingly volatile with global tensions mounting.