The Long Term – investors must always think long term when saving for retirement and if we put our eye to the long term, we see what is true. “If you die tomorrow, it does not matter what you do today with your money, but if you do not die, it matters greatly” (My words spoken many times to various investors).
Nick Murray does a great job with numbers. No one is more committed to the long term than he, and I am ever grateful for the numbers he keeps and discusses. Important number fact to keep in mind when considering how to save for retirement: In 1953, the S&P average was 26. Friday, April 17, 2015, the S&P average closed at 2,081 after declining 1.13% for the day. That is an increase of over 80 times in 62 years. That number does not include dividends on the S&P at $1.40 in 1953 and $ 39.00 in 2015, an increase of nearly 28 times.
Those numbers are a complicated way of saying, “He bought X back in 1953 and now it is worth millions and he also earns more dividends in one year than he can spend.”
Whenever the market has gone up and we have not had a correction, certain ideas hit the news. (1) The market must go down soon. (2) The market is too high, and it can’t continue to go up. That’s when you put your blinders on and remember (3) The market may go down for a while, but it has always come back to go on to a new high, and, (4) While the market may seem high, those highs are forgotten when a new high is reached. Simple points, but regularly forgotten.
The market, as measured by the Dow Jones Industrial Average (DJIA) or S&P 500, continues to waver – down and up – and seemingly, not much progress, but look again. For a while the DJIA was wavering between 18,000 and 17,000. Lately it seems to like the range of 18,200 to 17,600. Merely interesting on the short term but amazing to those of us who remember our incredulity of John Templeton’s prediction the DJIA would reach 3000 before the end of the 1980’s decade.
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