Check out these examples of saving $5000 and growing it in the market over 45, 35 or 25 years. The difference is astounding! Yet, this is the basic math of growing wealth over time in the market. “Simple, inevitable wealth”
Reaching a new high doesn’t mean the market will retreat. Stocks are priced to deliver a positive expected return for investors, so reaching record highs regularly is the outcome one would expect.
Global markets, in the last 12 months, performed strongly with our model portfolios made up of 40%-100% global stock up from 13% to 34% and a slight cooling in Q3.
More than 200,000 California companies are about to swamp the system that cannot hire enough people as it is. Better get it done now and avoid the chaos of the first half of 2022!
The past three decades have been a period of relatively moderate inflation in the United States with the annual increase in the consumer price index averaging around 2.3%. Yet the impact of even this amount of inflation has been to reduce the purchasing power of an uninvested dollar by around half.
A look at headlines from the past 50 years shows the difficulty of timing markets around inflation expectations. Investors may be better served sticking to a long-term plan.
Inflation is handled with a stock portfolio and for those with concern about the volatility of stocks, inflation hedges like TIPS (treasury inflation protected securities) are smart. (This is what we do.) As always an ongoing long term and short term rebalancing strategy is additive.
Indexes are helpful but a challenge is that they often drift quickly and in a short time no longer represent their target asset class. We like the author’s analogy of a lawn that has not mowed in a long time.
