By: Bill and Cindi Porter, AILERON INVESTMENT ADVISORS
Q: Is it wise to get out of the stock market given the recent vitality?
A: Probably not. Warren Buffet once famously said, “It is wise for investors to be fearful when others are greedy and greedy when others are fearful.”
Buffet is putting his money (Berkshire Hathaway’s) where his mouth is. In the past couple of months while the market has been lowering its price for shares – he is buying – tens of billions in stocks. Given that the market has always recovered from setbacks and gone on to reach record highs, and while many people are fearful, he is being (as he puts it) greedy.
History has been very informative on this topic. If you had tried to get in, and out, and back in the stock market based upon your comfort zone, your investment results would have been very different. Consider this.
If you had invested $10,000 on January 1, 2002, in the S&P 500 index and let it stay invested the entire time your account would have grown to $61,324 on December 31, 2021.
If instead you had jumped in and out of the market and missed the 10 best days over that 20 years, your account would have only grown to $28,095. If you missed the best 20 days, you would have gained only $16,706. If you missed the top 50 days you would have lost nearly half of your investment ($5,132.)
Investing in the stock market is a long-term investment spread out over many years. You need to be invested when the big jumps occur unexpectedly. Finally, where you invest in the stock market also matters. There are 11 sectors in the S&P 500. Ten are down for the year so far, but energy is up 58.66%.
It is a good time to visit with your advisor to ensure you are on track with your goals.
Securities and advisory services are offered through Madison Avenue Securities, LLC (MAS), a registered investment adviser & Member FINRA/SIPC. MAS and Aileron Investment Advisors are not affiliated companies. Investing involves risk, including the potential loss of principal. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.
This is for education only. Before using this information in any way discuss it with a financial professional. There are many risks associated with stock trading. You may lose some or all of your financial investment. Securities offered through Dempsey Lord Smith, LLC Member FINRA/SIPC. Securities offered through Integrated Financial Planning Member FINRA/SIPC. Advisory services offered through Dempsey Lord Smith, LLC. All the information in this letter is published in good faith and for general information purposes only. We do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information is strictly at your own risk.
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All the information in this letter is published in good faith and for general information purposes only. We do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information is strictly at your own risk.
