As it turns out, almost all of us are not very good at investing.
Ian Wilson, former GE executive said it well: "No amount of sophistication is going to allay the fact that all of your knowledge is about the past and all your decisions are about the future."
When we invest our money in the stocks of the great companies of the United States and the world, we likely tilt the odds in our favor. And the longer we leave our money here, the more likely we will be rewarded.
"Whatever happened to stocks for the long haul?" asks an analyst named Ms. Subramanian, "it became quants for the short term." (Subramanian, Strategy Snippet) The most contrarian investment strategy, she says, is to invest for the long haul. As it has been in the past so it is today. Contact us for her article.
We are sympathetic to Ms. Subramanian's point. We've made things so complicated that we forget about the fundamentals. Over time, stocks historically make more money. If we're investing for a long period of time, we typically want more money invested in the great companies in the US and the world. But she goes one step further and presents some fascinating charts and statistics. Contact us for her article.
Take for instance this statistic: The market may be efficient, but it's not perfect. Here is great news for long-term investors like you and me: long-term market inefficiencies have increased!
One of the reasons for this is the trend for firms to hire short-term quantitative analysts, data scientists, and traders rather than analysts. Thinking people are being replaced by computers.
What it amounts to, I think, is that people are investing today with the past crisis front and center in our minds. Money has flowed into "low volatility" and alternative investments. I believe this leaves the great companies of the US and the world, and us, with better opportunities than we've had for years.
If you have more questions about how to mix long-term investments with your short-term needs for safety, give us a ring! We are happy to answer.