“We do not have, never have had, and never will have an opinion about where the stock market, interest rates or business activity will be a year from now.” – Warren E. Buffet, the worlds most admired, least imitated investor, in his annual letter to shareholders dated 30 years ago today, February 28, 1989
- On February 28, 1989 the Standard and Poor’s 500 – Stock Index closed at 288.26. On December 31, 2018 it closed at 2507, fairly close to nine times where it was on the day of Buffet’s letter. Of course, this ignores dividends.
- The cash dividend of the S&P 500 for the full year 1989 was $11.73. For the full year 2018, it was $53.61, a bit more than four and a half times where it was in 1989.
- To get a sense of how these increases compare to inflation, note that the Consumer Price Index stood at 122 in February 1989. In December 2018 it was 253, having slightly more than doubled in the interim. When will we ever learn? It was never about “timing the market.” It is always about TIME IN THE MARKET.
I hope you have a great day!
This is being provided for informational purposes only, and should not be construed as a recommendation to buy or sell any specific securities. Past performance is no guarantee of future results, and all investing involves risk. Index returns shown are not reflective of actual performance nor reflect fees and expenses applicable to investing. One cannot invest directly in an index. DCH Wealth Management, nor any of its members are tax accountants or legal attorneys, and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional. The views expressed are those of DCH Wealth Management and do not necessarily reflect the views of Mutual Advisors, LLC or any of its affiliates.