Refocus 4-24-2020

Please check out this weeks Refocus where we help investors tune out the noise and turn our attention to the long-term perspective needed to maximizing the probability of successful investment outcomes.


Transcript:

00:05

Hi, I'm Bill Woodruff. I found in well factor because investors deserve better. Wall Street in the media businesses rely on keeping you engaged. This focus on the short run is more likely to hurt you can help. I'm pleased to offer this week's wealth factor refocus, where we cut through the noise and focus on the long term. Let's jump right in. This graph represents the long term performance for the s&p. It's in a log scale, which makes the visual change between 10 in 100 appear the same as the change between 101,000 This graph shows the incredible results. buying and holding stocks has produced historically $10 invested in the early 1900s would be well over 1000 today. To take this concept forward. The index change from 1000 to 10,000 is mathematically equivalent. To the move from 100 to 1000. The type of investor worried about prices dropping in the short term has little to no chance of capturing the market return over time. This page makes a very strong case to ignore the short term. Today we've got the Coronavirus, oil price declines in election year uncertainty as reasons not to invest. While each of these have their own unique elements. Looking back historically, there are persistently reasons not to invest those with the belief that the world will move forward, and companies will continue to provide goods and services should look at material declines in stock prices as opportunities to buy rather than reasons not to be invested. This time is always different in its own way. But that doesn't mean stocks won't provide strong long term returns relative to other investments. Lastly, couple thoughts on how the media and Wall Street make it hard on us to ignore the short term. news outlets are telling us what direction the stock market is going all day every day. Their latest area of focus are the futures markets telling us before the open and after the close what's to come. It's also worth noting they're constantly sensationalizing things. always choosing to refer to price changes in terms of points, not percentage. Doing this doesn't give us useful information, as it declined in the early 1900s. From 20 to 10, for an index would only be 10 points. While today I dropped from 30,000 to 2500 is 500 points. Wall Street isn't a lot of help either, especially the parts that are trying to make it seem like they can predict the direction of the market in the short run. Those that do this in the media are constantly changing their views. For example, Goldman on March 29, said the market will turn lower And infer that it hadn't bottomed. Then on April 13, called that that bottom was already in. After Goldman's bearish views were expressed, the s&p went up almost 9%. Big well known names don't have any advantages when it comes to predicting price movements in the short term.


SUMMARY KEYWORDS

declines, price, s&p, short term, invest, wall street, long term, sensationalizing, change, investor, index, factor, historically, ignore, news outlets, market, futures markets, graph, predict


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