Hey everyone, first a cool story about my grade 12 math teacher, Mrs Skinner, we stay in touch frequently and bumped into her last week. She told me a student she had went to an Ivy League school, excelled and was invited to nominate an influential person in her life. That person was Mrs Skinner herself. The Ivy League school flew her down, all the bells and whistles including a limo pick-up and then an award on a grand stage in front of the school. How awesome is that! I told her that if I were ever in a position to nominate a formative person in my life, it would be her too. Though I’m likely not of the calibre to get such an invitation!
Have a great weekend.
Eddie
Stock Markets
A viral post I noticed by Finance Rob on Twitter:
Yes, Finance Rob pointed out a challenging 12 years for the SP500, the price was down 6.69%. It went viral as it is good fodder given the fear about markets being over extended, some hiccups in the AI sector (how about that shocking Jensen Huang NVIDA news?!), there’s no shortage of folks calling for a bear market.
But what Finance Rob doesn’t mention are two important things.
That is the price return, the dividends aren’t included. With dividends reinvested, a lump sum was actually positive 1.8% compounded, not great, but not negative.
Dollar cost averaging $100 every month from Jan 2000 to 2012 resulted in a compound annual return of 5%. Furthermore, continuing on for just two more years, by May 2014 the CAGR was 8%.
So while a simple chart may instill some nervousness for investors, sometimes you just need to take a step back and relax a little.
Set aside the fact that predicting the next crash is a fool’s errand.
For young(er) folks with a long time horizon and ability to continue contributing to their long term portfolios, even if we were on the precipice of a 2000-2012 like situation right before “the crash”, over time you end up doing pretty ok anyway.
Especially if you continued to participate in the 2012 - 2026 stock market era. That same ongoing DCA strategy from 2000 to 2026 has produced an 11.5% compound annual return.
To finish, I will leave you with this somewhat dated but timeless post by Morgan Housel (author of the Psychology of Money):
1 Quote
“Life is like a bicycle. To keep your balance, you must keep moving”
—Albert Einstein
A Question
What is a small, everyday thing that instantly puts you in a good mood?
For me - spying on my daughter playing in the schoolyard before picking her up.
