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Welcome to Roots of Wealth. A financial blog focusing on life, planning, and interesting information worthy of sharing with you.
Roots of Wealth is proudly managed by Crimmins Wealth Management Located in Ramsey, NJ.
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The Moving Finger Writes: Thirty Years On

February 13, 2019 by Dan Crimmins Leave a Comment

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. Buffett, the world’s most admired, least imitated investor, in his annual letter to shareholders 30 years ago this month, dated February 28, 1989

landscapes photo

Note:

  • 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.
  • 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.

The time frame of 30 years is an appropriate time horizon to review as the average retirement duration of a couple retiring at age 65 will likely last for three decades.  Make sure your actions reflect that reality.

Dimensional co-founder David Booth adds:

Have A Wealth Management Question? Click Here To Ask Dan

Every year they say it’s going to be a stock picker’s market; you’ve going to have to be selective. For the 37 years we’ve been in business it’s never turned out to be the case.

“The Moving Finger writes; and, having writ,
Moves on: nor all thy Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a Word of it.”

― Omar Khayyám

Hope you have a great week!
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The foregoing content reflects the opinions of Crimmins Wealth Management and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.

About Dan Crimmins

Dan Crimmins, co-founder of Crimmins Wealth Management, is a financial coach and fee only financial planner. Have a financial question? ASK DAN

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