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Everybody wants a “for sure” thing when investing.
That’s especially true for new investors. If you started investing in 2020 and 2021, you likely believed that the stock market was a magical money machine designed to grow your wealth overnight.
And then the 2022 bear market hit, and all these new investors learned an old lesson: what goes up must come down.
But what if it didn’t need to be that way? What if you could invest knowing with certainty you could make a positive return?
Well, I have news for you: it’s possible.
My Lawyer Isn’t Happy with This Blog Title
To be clear, I am not saying I’m guaranteeing any investment returns (my attorney made me include this).
But historically, the approach I’m going to show you has a 100% success rate over the last 125 years.
And it all has to do with your most precious resource - time!
In 2019, investor Graham Duncan coined the term “Time Billionaire” which is a person who has over one billion seconds to live.
For reference, one million seconds is 11 days, while one billion seconds is 31 years. That means someone in their 20s has 2 billion seconds left to live.
At the age of 35, I have about 1.5 billion seconds left. I am a time billionaire, and I plan to use that to make myself a multi-millionaire in the markets.
Use Your Time Wisely
I bring up the topic of “time” in investing because it’s arguably your greatest wealth building asset.
When you’re young and have more time, you can take on more risk.
For instance, young people - or “multi-time billionaires” - generally have a higher risk tolerance relative to older investors. That’s because they have more time to recover from potential market downturns – like the 2022 bear market – and short-term market gyrations.
By investing in riskier assets like stocks and crypto and eschewing low-risk assets like CDs and bonds, they have the potential to earn higher returns over the long run.
But young people also have a longer time horizon for their investments as they’re in the early stages of their careers.
And as anyone who bought crypto near the highs last cycle will be happy to hear, having more working years ahead means you can recover from any losses they may encounter on their investing journey.
Plus, over a long period of time, you are all but guaranteed to earn a return in the stock market.
It Pays to Be a Long-Term Bull
I’m sure plenty of people reading this made money betting against the market in 2022.
But while that may work once or twice in your career, 99% of investors are better off using time to their advantage and remaining long the stock market.
Over the last 90 years, the S&P 500 has delivered average yearly gains of 10%, with the index delivering positive returns in 73% of those years.
But there’s more: including dividends, stocks have been up 88% of the time overall five-year periods for the last century.
Over ten year periods they’re up 95% of the time. And if you want a “guaranteed return,” there has never been a 20-year period of negative returns for the S&P 500.
Ever. It’s literally never happened.
So instead of trying to predict the next market crash, instead use your time to your advantage.
Work Smarter, Not Harder
I understand that anything can happen in the future.
We could have a nuclear holocaust, the planet may warm and kill all life, or aliens might invade and enslave humanity (we’ll have much bigger problems than investing if any of these events come to fruition).
But if you have the “time,” it makes sense to invest with a long-term view. The odds are simply too favorable to do anything else.
And that doesn’t mean you can’t make speculative bets along the way with a small percentage of your portfolio (as I do):
But on the whole, if you hold most of your investment portfolio in safe and reliable index funds and blue chip stocks, you will almost certainly earn a positive return over the long-run.
Because this time is – probably – not different.
Stay safe out there,
Robert