As the calendar turns to March, we suddenly wake up and realize 1/6th of 2019 has been relegated relegated to history. For those New Year’s resolutions that dealt with your personal finances, how’s that working out? The attached article might help get on track if your goal was to get a handle on your finances. While many are already retired, boosting retirement savings might seem misplaced, we all should have an emergency fund of some sort. I’ve always recommended 6 months of living expenses. Just building up a credit union or bank savings account will help in the event something happens that presents a need for cash. That way, the retirement and investment accounts can keep working without a reduction in principle.
Speaking of working, these first 2 months of the year have been working well. All the US indexes, the Dow Jones, S&P 500 and the NASDAQ are all up about 11.5% with the NASDAQ coming in at 13.74%. This is pretty remarkable considering the way 2018 ended. We remember all the talking heads were pointing to the end of the investment world as we know it. While this news is well received and nice to see on the investment statements, what really matters is where we will be in 10 or even 20 years from now.
As a reminder, this quote was in my February 4th email:
• On February 28, 1989, the Standard & Poor’s 500-Stock Index closed at 288.26. On December 31, 2018 it closed at 2,507, fairly close to nine times where it was on the day of Buffett’s letter. Of course, this ignores dividends. BTW: Last Friday the S&P500 closed above 2800.
• 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.
Please don’t hesitate to call or email me should you wish to go over your account/s. My office move will be completed this week. Remember, investing is equities has risk and there are no guarantees when it comes to investing. Hope you have a super day!!