Hello everyone!

Items on the agenda today:

1. Dollars Spent vs Dollars Invested

2. Timing the Market ✖️ vs Always Buy ✅ 

3. Could the Office Market Make a Comeback?

If any of this is helpful, please share with your friends. 

Personal Finance

There’s an old saying in the land of money that “earning is slow, spending is quick”.

Indeed, there is a stark difference between those who create wealth and those who never attain it.

The difference lies squarely between those who focus on earning more, spending less, and investing the difference vs those who prioritize spending without much, if any, attention to their bottom line. The former requires time. The latter, instant.

Everywhere you look, literally, everything you look at—the yellow paint on the streets, the traffic lights, the coffee and donut, your Gucci shoes, the glue on that bumper sticker, that nice white picket fence—is someone’s revenue.

Equally so, it’s someone else’s cost. But not in the traditional way most people think about cost—there’s more to it.

Let’s say you buy a pair of sunglasses for $200 bucks—you go home and proclaim these sunglasses only cost $200 bucks!

Sadly, that’s wrong.

Why? Because if you had invested that same $200 bucks in an index fund for 7 years it would have doubled to $400 bucks (compound interest is beautiful).

So the glasses didn’t just cost you $200 bucks, they actually cost you $400 bucks.

This is what we call opportunity cost.

Once you learn the difference between a dollar spent vs a dollar invested, you’ll start getting richer way faster than ever before.

Sometimes, I think readers of this Journal might get a little annoyed by the constant drip of earn more-spend less-invest the diff but the reality is that’s the only way to build yourself a secure financial future.

Doesn’t mean you shouldn’t have fun along the way—just budget for it—and make sure you are investing as much as you can, while you can.

The opportunity to get rich is essentially a factor of time, earnings, costs, and compound interest, and it’s there for the taking.

Up to you how to use it.

Stock Markets

A reader of this Journal at one point mentioned “you didn’t discuss Dollar Cost Averaging in your Simply Investing Course”.

True—I didn’t mention those three words.

I also didn’t mention some other "commonly” used investing terms:

• Beta

• Sharpe ratio

• R-Squared

• EMA

• Duration

• Yield curve

• Convexity

• Etc.

Ladies and Gentlemen, it’s in the name—“Simply Investing Masterclass”

If I mentioned stuff like that, the cohort I’m aiming to teach would fall asleep or get pissed right off with confusion and stay broke.

The reality is, terminology isn’t important to be a great investor. In fact, I’d argue that overly complicating the investing process will lead more investors to poor results instead of good ones.

That said, what is Dollar Cost Averaging, anyway?

*Simply* put, dollar cost averaging is the practice of investing a fixed amount of money at regular intervals, regardless of current market conditions. It’s both convenient, and can help you avoid costly investing mistakes (source).

Pretty sure I said just as much, and more, in the course as well as in this newsletter:

• pay yourself first, every paycheque

• contribute consistently to your portfolio with automatic deposits

• turn on automatic recurring investments

• turn on automatic dividend reinvestments

• don’t time the market

• buy, buy, buy

• etc

So while some people—even though I truly do appreciate and value their wisdom—tend to focus on the minutiae, they might miss the forest for the trees.

Don’t let that be you, keep buying more shares, and maybe one day you’ll own that forest.

PS - here’s an infographic I created that shows you how consistently buying shares rather than timing the market can lead to better results.

Real Estate

If Trump’s return to office mandate is upheld, it will be a seismic event for the Office sector and could bring forward a more stabilized Office Market.

Consider, too, the plethora of companies revising their WFH policies and in some cases mandating a full return to work:

• Amazon: starting Jan 2025, Amazon requires corporate employees to work in the office five days a week.

• AT&T: starting Jan 2025, AT&T mandates all office employees to work on-site five days a week.

• JPMorgan: senior staff and managing directors in the office full-time.

• Goldman Sachs: requires employees to be in the office full-time.

• Disney: since March 2023, Disney required employees to return to the office four days a week.

• Apple: minimum three days a week.

• Meta: In 2023 Meta required hybrid employees to work in the office three days a week.

Of course, there is still a ton of demand for WFH in both the Public and Private sector that will battle hard for that privilege and continue to keep Office valuations at bay, for now.

But it’s a trend that might help the beleaguered sector recoup from a devastating 5 years since Covid. Indeed, according to CBRE, after extremely rapid increases in Cap Rates since COIVD (cap rates up = value goes down), valuations measures have begun to flatten out.

We shall see what this chart looks like this time next year.

What do you see for the Office sector over the next 3 to 5 years?

1 Quote

A Question

Anyone else seen Mufasa yet?

If you’re at all nostalgic over the Lion King, this is a MUST WATCH—in theatres!

Definitely in my Top 5 movies.

Get some good popcorn, too.

_____________

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Thank you

Eddie Gudewill, CFA

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