We Remain Confident

“Imagine how much stuff you'd have to make up if you were forced to talk 24/7. Remember this when watching financial news on TV.”

- Morgan Housel

The events of the last three years demonstrate the utter futility of market forecasts. It is instructive that after the serial nightmares through which it's suffered since the onset of the pandemic early in 2020, the mainstream equity market managed to close out 2022 somewhat higher than it was at the end of 2019 (3,839.50 versus 3,230.78, a gain of 18.84%). Not too shabby of a three-year run during which our entire economic, financial, and geopolitical world blew up.

If anything, this tends to validate our core investment philosophy, which continues to be that the most reliable way for long-term, goal-focused, plan driven equity investors to capture the full return of equities is to withstand their frequent but historically temporary declines.

Our investment philosophy is not driven by an economic or market outlook. Short-term market events are impossible to predict. We are better served by focusing on our long-term objectives. During my career the markets survived 1984, Black Monday, an international currency crisis, the dotcom crash, terrorist attacks, wars, the sub-prime mortgage meltdown, and the recent global pandemic. Even the single day 24% decline on Black Monday hardly registers as a small blip on a long-term chart of the Dow Jones Industrial Average.

We are undaunted by the market’s 2022 performance and remain confident in the long-term compounding effect of a diversified stock portfolio as a method to create wealth.

Please let us know if you would like to discuss these topics or anything else on your mind.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.