The Long Term Investor

YOU are making us all BLUSH.....bigbear0083. Personally.....this site in general is the BEST investing site I have been on over my time posting about investing for the past 25 years on various sites. The moderation is OUTSTANDING. AND......the more contribution we get on this "Investing" forum and the various threads......as well as the various other forums on here.....the more it will SNOWBALL. SO.....please.......anyone.....feel free to post about your investing and experiences and opinions. AND......tell your friends, co-workers, fellow investors, etc, etc, about this site.

Emmett......you are right.......I dont care in the SLIGHTEST about the MORALS of the businesses that I invest in. What I care about in terms of China is.......the government and the fact that most of the financials are probably FRAUDULENT and therefore worthless. I care about the fact that the GOVERNMENT....can sweep in and make your investment WORTHLESS on a whim. I care about the fact that the government is controlling the businesses. I care about the fact that the government is controlling company management.

SO....for me as an investor.....to sum it up in one word.......a REALLY big word......RISK. There is such EXTREME risk investing in companies that are under the thumb of this sort of TOTALITARIAN DICTATORSHIP......that.....I think it is INSANE to take that sort of NON-BUSINESS RISK as an investor. It is IRRELEVANT how successful or amazing the business is......your investment can be wiped out at any time the government chooses.

YES.....Vanguard VFINX....which I use for total return data.....has the YEAR TO DATE.....total return..... for the SP500 at ......+17.58%. I am seeing the year at somewhere between +17% and +22% as I have said a few times on here. EXTREMELY IMPRESSIVE and well above the historical average for the SP500.

 

TO ALL.....we are so lucky to have this place to hang out and talk investing. Lets have a GREAT end to this year and a good kick off to 2021. SO.......HAPPY NEW YEAR TO ONE AND ALL....a few days early.

LETS GET OUT THERE AND MAKE SOME MONEY THESE LAST THREE DAYS OF 2020.

 

YET another.......very minimal.....red day today. AND.....a minimal beat of the SP500 by .06%. The markets are directionless. Today and......i would guess tomorrow.......will just be lost, irrelevant days. Perhaps when the Wall Street guys come back after the new year we will see more direction.......one way or the other. The EXCUSE today.....stimulus drama.

The EXCUSE......Monday and Tuesday.....no doubt will be the Senate elections in Georgia. The EXCUSE......after that......whatever. I guess we have to digest the gains and BIG bull market we have seen in the second half of this year for a while.

I dont see any CLEAR short term direction. At the moment.....I dont see any CLEAR direction for 2021. SO......not a bad thing to be a long term investor and not care about this short and medium term "stuff".

 

As usual.....so simple......so true.....yet nearly impossible for most people:

Creative Long-Term Investing Is The Best Kind

https://seekingalpha.com/article/4393840-creative-long-term-investing-is-best-kind

(BOLD is my opinion OR what I consider important content)

"Summary

• Investing is a long-term project.
• In the short run, there will be sell-offs, corrections and even crashes.
• Knowledge of these 'bad' events cripples many investors' prospects.
• The most successful investors focus on researching the best prospects (companies) to own for the long term - and do just that.
• Be strategic and optimistic for better returns over time.

Introduction
There will not be single chart or statistic in this piece. There will be references to 'famous' investors, timers, and market shorts, for the sake of illustration. I will mention certain stocks - some that I own or did own and some that I have never owned.

I firmly believe that a minority of market participants are true investors, if an 'investor' is someone that places resources in the markets with the purpose of making solid returns over time. The majority is actually composed of Bears and market timers.

Bears and market timers want to be successful investors or traders, but often operate on misguided assumptions and counter-productive short-term focus. The more successful participants mix correct assumptions, longer-term focus and emphasise patience, self-confidence and optimism in their decisions. These are true investors, and are much more likely to build excellent portfolios over time.

Recent research towards analysing stocks such Tesla (TSLA), suggests that additional factors help create exceptional investors. These people seek to understand companies deeply. They want to understand a company's 'DNA,' the thought processes of its leaders. The focus is on what the company is made of, the quality of its leadership and products, and the rate of its progress towards its own goals.

Some investors will even minimise the role of metrics and earnings reports in their work - in order to focus on those factors. One investor that fits this profile is Dave Lee (available on YouTube).

I do not claim to be among this group. I have fallen victim to short-term thinking fairly often and sabotaged my own investing results. Still, I am confident that my own strategy has improved by aligning my thinking with successful investors of past and present.

Common & Flawed Market Assumptions
The approaches of successful and famous investors are very different from those of many market participants.

Common and flawed assumptions may include beliefs such as:

* Negative macro events and phenomena will cause a correction within 'x' time (usually months or a few years);

* Profits are not profits unless you take them;

* A stock that has had a large, swift run-up must inevitably correct or even crash;

* Only boring, established stocks are worth a long-term investment. Start-up or 'story' stocks are inherently volatile and thus too risky to own.

The impact of macro events on stock markets is always uncertain and often exaggerated. Put another way, while some powerful real-world events - COVID-19, the 2008 financial crisis, 9-11, etc. - do impact markets, they can rarely be predicted. Of the three, only very aware, market-savvy people might have predicted the 2008 event. Of these, only a small minority acted on those insights to their own profit and benefit.

In some cases, individuals such as Michael Burry that did act boldly have been frequently wrong since. Burry was portrayed as genius material in 'The Big Short,' a market savant. And he may yet be. But nobody is perfect: even Albert Einstein derided 'The Big Bang' when it was first proposed. For long-time investors, it makes more sense to watch and learn from Joel Greenblatt, Warren Buffett, Peter Lynch, Bill Miller or Ron Baron than from the stars of The Big Short.

A market savant may be ideal to predict or even profit from events like 2008. However, the nature of their genius is not likely to help your long-term investing.

Profits are not profits until you take them. True, numbers on paper are just that. Letting a stock run means taking the risk that its share price may correct, even severely. It is true that, if you do as I did with ROKU, and cash out at 74 per share after investing at 34 per, the profit is tangible. It is also true that, had I held onto my ROKU shares, they would be worth over 296 dollars each today (6 Dec. 2020). I did quality research on The Trade Desk (TTD) and made a smart decision to buy. But the Bear and market timer in me provoked a sale of TTD.

As for the belief that numbers reflecting shares of securities in a brokerage account are inherently risky, no form of money is guaranteed. I recall very well seeing lines of people in an affluent suburb of Silicon Valley waiting to cash out their Washington Mutual accounts in 2008. The price of gold sometimes declines, precipitously, and can remain depressed for years. Bitcoin? A decent bet as an evolving alternative to gold or other metals - but hardly proven as a present-day alternative to paper assets. Few people that decide to cash out all stocks will turn to Bitcoin in a one-for-one assets swap.

High-trajectory stocks will inevitably correct, savagely. There are many examples of this kind of price action, but the trend is not comprehensive. Many young 'hot names' are inherently volatile. Their stock will decline more than the average during a correction; in a severe correct that decline may be profound.

An example is Amazon (AMZN) and Ron Baron. This billionaire, who has made a fortune investing in Tesla (TSLA), studied Amazon in its early days, visited Jeff Bezos and yet did not build a position in AMZN. In a CNBC interview with Becky Quick, Baron refers implies that this actually made him more decisive about Tesla. He was, and remains, untroubled by the trajectory of TSLA stock.

None of that impacts the long-term thesis if the story is sound. If it is inherently flawed, that is another story. If certain stocks are caught up in a vast bubble, as happened with Cisco (CSCO) during the dot.com bubble, that is a single phenomenon in a much larger sample. The argument that we are now wrapped in such a bubble is certainly interesting and relevant, but does not negate the essence of long-term investing or the value of filling a portfolio with names in which you believe.

Only boring, established companies make sense to hold for the long term. I think this is pretty obviously not the case. Tesla, Amazon, the young Apple (AAPL) and a host of other names - including those that will emerge from a list that includes ZM, CRWD, SNOW and LMND (among others) - made great sense to hold for the long term. Amazon and Apple have become the very type of established company that introduces a measure of safety to a portfolio. Every company that is 'boring' or 'safe' today was once young, with uncertain prospects. Others such as IBM, GE or even CSCO prove that no stock is a bond (even bonds are no longer bonds, in a way). Some blue-chips will crater, and others apparently on the way there will never arrive.

No matter the stocks in which you do invest, your chances for long-term success are only great if you avoid the perils of bearishness and timing. A few points in that regard:

1. Staying a Bear cripples long-term results, for bearishness ignores market history;

2. Market timers make up an interesting, heterogenous, eclectic group of market participants. Often, they become very reliant on indicators in a series of complex technical charts - and are driven to trade based on those charts. Timers believe they can predict the short-term price action of a single name, sector or the entire market. As a group they are usually proven wrong.

Summary: Be like Buffett, Baron or Greenblatt
Today it is fashionable to claim that the markets are in a huge bubble and that doom awaits just around the corner. I am aware of these arguments, have read the articles and seen the charts on debt and unemployment rates. Even if the proponents of a soon-to-explode bubble are right, it does not change the thesis.

The game is about selecting and buying the companies in whose businesses you believe. Warren Buffett is legendary for his quotes on the topic. So many have appeared in articles here that I won't repeat them. Peter Lynch was all about understanding the businesses in which you invest, and waiting. Buffett's long-term partner Charlie Munger talks about buying names in which you have confidence and then waiting (Munger's language is more colourful). Joel Greenblatt is rather boring to listen to, proving that genius need not be interesting.

Bill Miller is not really exciting to listen to, while Ron Baron is lively and delivers a nice turn of phrase. But what Baron says about his own investing history (witness his comments about AMZN and TSLA) is more compelling than his low-keyed delivery, often against the backdrop of some pretty scenery. Dave Lee, while not a money manager, is a brilliant researcher that uses 'first principles' and studies companies that he finds intriguing. Here is another example - Lee's interview with Lemonade's (LMND) CEO Daniel Schreiber.

Lee, Baron, Greenblatt, Lynch, Buffett, Munger and Miller are (or were, in the case of Peter Lynch) very different people, yet they shared certain characteristics - intelligence, fascination with business and the markets, intense curiosity, love of research, comprehensiveness and self-confidence.

We can all become better investors if we listen to them while reducing those pesky urges to bearishness and market timing. More research, less short-term thinking, more patience, and, yes, more self-belief.

Best of luck investing."

MY COMMENT

Once again.....so simple yet so difficult for most people.

People use all the charts......and systems......and....technical "stuff" as a mental CRUTCH. This sort of thinking gives a FALSE sense of security and comfort. It makes investing......scientific......and therefore safe and secure. It creates the FALSE impression that how you are investing and what you are investing in is......somehow....being driven......and....APPROVED by outside factors. It removes PERSONAL RESPONSIBILITY from investing. After all.....I bought that stock because the chart......indicated that I should. UNFORTUNATELY......it DOES NOT work. There is NO magic answer to what to buy or when. There are no shortcuts.

YES......fundamental financials are important to the long term investor.....but.....in addition......here is the REAL key to investing....long term investing......success:

"Understand companies deeply. Understand a company's 'DNA,' the thought processes of its leaders. The focus is on what the company is made of, the quality of its leadership and products, and the rate of its progress towards its own goals."

In other words KNOW and UNDERSTAND.......THE BUSINESS......the company. It is......critical.....so see a stock as owning part of a REAL BUSINESS.....not as just some financial instrument.....that is used to make money.

 

Pratik Rai....welcome and feel free to post and discuss investing here. To answer your question:

NO.....I can not. First, the the majority of the stocks that I hold ARE NOT........low risk and low return......TESLA, SNOW, NVIDIA, GOOGLE, AMAZON, MICROSOFT, APPLE.......are FAR from low return and FAR from low risk. Second.....if you are looking for stocks to invest in........especially small to mid cap.......and.....more risky than those that I have listed.....you are going to be taking SIGNIFICANT risk.

What stocks are you considering?

My only advice to you is......PLEASE reconsider your thinking about RISK and investing. I cant tell you what to do or how to do it....but.....if you have little to no experience with investing......CAREFULLY CONSIDER what you are doing.

I remember back in the CRAZY day trading era of the 1990's. My plumber came to do some work at my business. We got started talking about investing. He and his wife were both day trading. I was telling him about my holdings in CISCO, MICROSOFT, etc, etc. ALL the stocks I was telling him about were the high flying......very young tech stocks of that era. They WERE NOT the more mature companies they are now.

His reply was......."oh, you are investing in the big safe companies". At the time these companies were far from safe and they were far from big cap. I asked what they were trading......it was ALL extremely speculative, tech, penny stocks of the era. ALL were classic dot-com era stocks with little to no customers or history.......stocks that just put up a web site, did an IPO and raised a ton of money even though there was literally no business. I tried to give him a little advice but he was determined that they knew what they were doing and he would soon retire from plumbing.

ABOUT 6 months later he was back to do some work. I asked him about his investing.......he had NOTHING to say.......and was extremely non-responsive...it was obvious that it did not end well and he was back to being a plumber.

What is going on now with ALL the young inexperienced stock traders and speculators reminds me of that era. It WILL end the same way for most of them.

 

ANOTHER blah day for me......so far. LITTLE TO NO change in my total portfolio....in spite of the averages being positive. I suspect that this will be the trend for me over the final two days this week.....lingering, blah, results.....not up, not down....much.

I STILL believe.....being a general BULL since I am always long term....that 2021 will be a decent year for investors. BUT....I also think there is a SIGNIFICANT chance for a down year and even an old fashioned many months long correction or even a 6-12 month BEAR MARKET. NO ONE can predict the short term.......1-12 months. For all those new stock traders that are basking in the glow......BUYER BEWARE. The markets over the short term are very dangerous.....they can turn on you in an instant......and......BITE you in the butt......VICIOUSLY.

I am NOT saying it will happen.....but....this sort of market can COLLAPSE much faster than you ever imagine. AND.....the average.....NEW CONVERT....caught up in the fervor......will NOT see it coming. For long term investors......no problem.....for those taking significant risk that they do not understand.....it will be WHIPSAW CITY once they panic and bail.

 

Dont get me wrong.......corrections and even bear markets are part of the process of a HEALTHY stock market. NOT something to try to avoid or market time. As a long term investor.....you just hold through these events.....and.....if you have cash to invest you take advantage of the good stocks that are on sale.

These events.....to me......are the indicator of your ability to put together a portfolio. For me.....a good portfolio model.....will.......yes......drop during these times....but not as much as the average investor or the general markets. These events are when money is made......even if you dont have cash to invest. If you have a nicely constructed portfolio.....the strength you show during these types of events is.....money in the bank when the market starts back up.

It is ACTUALLY....nice to see all the EXCESSES get pushed out of the markets during a bear market. This separates the good companies from the bad.....and shakes out the investors that should not be in the markets. It is the ULTIMATE wake up call for everyone when it comes to RISK TOLERANCE. It turns day traders and speculators into REASONABLE and REALITY based investors.....at least those that are not scared away for life.

LOL.....I just looked at two of the accounts that I invest.....they made my laugh out loud. The two accounts represent about $4MIL in stocks and funds. One is UP by.....drum roll please......$11.32. The other is DOWN by about........$179. It is that kind of day. ACTUALLY.....it is fine with me. If we can preserve where we are right now.....up over 17% in the SP500 total return year to date......it is an AMAZING RESULT for a very difficult year. ALL of the five accounts that I currently manage.....including my own..... are at all time highs. NO SURPRISE THERE.....since they are ALL set up with the same basic portfolio.

 

I saw a fear mongering headline today about home sales. It SHOUTED OUT that pending sales fell again for the third straight month. It is OBVIOUS to anyone that follows home sales that the number of available homes for sale is WAY DOWN....it is generally a SCREAMING sellers market. Here in my general location.....we have a neighborhood of about 3000 homes that range from a low of about $400,000/$450,000 to a high of about $6MIL. In that range there are currently a TOTAL of THREE homes for sale.

Pending home sales decline for the third straight month

https://finance.yahoo.com/news/pending-home-sales-november-2020-150002155.html

(BOLD is my opinion OR what I consider important content)

"A key leading indicator of the health of the housing market unexpectedly slipped in November.

Pending Home Sales Index, the number of homes that are under contract to be sold, fell 2.6% to 125.7 last month from October — the third straight month of declines — according to the National Association of Realtors (NAR). Analysts surveyed by Bloomberg were expecting pending home sales to be flat from October. Despite the monthly dip, pending home sales are up 16.4% from the same month a year ago. And contract signings are up across all regions in the U.S. from a year ago.

“The latest monthly decline is largely due to the shortage of inventory and fast-rising home prices,” said Lawrence Yun, NAR’s chief economist, in a press statement. “It is important to keep in mind that the current sales and prices are far stronger than a year ago.”

The housing market has been a bright spot in the economy amid the COVID-19 pandemic. Historically low interest rates, pent-up demand from COVID-19 lockdowns and low inventory has put upward pressure on home prices. According to the NAR, median existing home price rose 14.6% to $310,800 in November from the same time a year ago, close to nine straight years of monthly annual increases. On Tuesday, S&P CoreLogic Case-Shiller national home price index posted a 8.4% annual gain in October, up from 7% in September, marking the fastest growth rate since March 2014.

Total housing inventory at the end of November was 1.28 million units, down 9.9% from October and down 22% from one year ago, according to NAR. Unsold inventory sits at an all-time low of 2.3-month supply at the current sales pace, down from 2.5 months in October and down from the 3.7-month figure recorded in November 201

“The market is incredibly swift this winter with the listed homes going under contract on average at less than a month due to a backlog of buyers wanting to take advantage of record-low mortgage rates,” Yun said.

The results follow existing and new home sales data that also fell in November. Existing home sales fell 2.5% to a seasonally adjusted annual rate of 6.69 million units last month and new home sales plummeted 11% to a seasonally adjusted annual rate of 841,000 units last month. Experts attributed the declines to low inventory, increased construction costs and lack of skilled labor."

MY COMMENT

I love how this little article starts out all doom and gloom. A key indicator UNEXPECTEDLY slipped in November....the third straight month of declines......than...the truth comes out over the balance of the article that we are in a ROARING real estate market. ALL time high prices, all time high year over year gains, all time low numbers of listings, all time high pending sales.

In addition to a GREAT year in stocks...many of us...depending on location have experienced all time highs in the value of our homes. AND....I suspect all time highs in our net worth. I suspect that MOST of us on these forums have much to be thankful for this year. A good time to give something back to your community and those around you that have not been as fortunate.

 

REMEMBERING.....Leslie West today. I had to listen to "Mississippi Queen" as a memory and tribute.

He died about a week ago. Anyone that was a teenage or twenties male back around 1970 remembers "Mississippi Queen". That cow bell and that opening riff....one of the most ICONIC opening TEN MEASURES of any song of that era. Within days after it hit the radio....EVERY bar band in the world was playing that song. It reminds me of OTHER iconic song openings of that era......"Hush" as recorded by Deep Purple with that Hammond Organ and "Taking Care Of Business" a little bit later in the 1970's.

"Mississippi Queen"......was used for the past 5 decades in many, many, TV shows and movies and soundtracks......the ultimate MAIL BOX MONEY song. I am sure he made a fortune on that song. He also wrote one of the most "sampled" songs by many different Hip Hop artists. He said he had 5 or 6 gold records hanging on his wall from Hip HOP albums that sampled his song. He had a great career....not top tier....but definately a solid national/International touring act and name. He played in the original Woodstock Festival with his band "Mountain".

The name of the game in music is NOT performance....it is song writing. That is where the REAL lifetime money is.......and Leslie definately did well in that regard. Great work.....RIP.....Leslie.

 

TYPICAL.....another minimal RED day today......less than $500. AND....got beat by the SP500 by .20%. At least the averages ALL managed to end in the GREEN....that should extend our total return for the year a little bit. TOMORROW is it......last market day of the year....after that we start at......."0". One nice thing about long term investing......you get to start over.....a new beginning....every year.

I enjoyed the posts and interaction with EVERYONE this year. I HOPE ALL you guys stay active on here next year.

 

THANKS.....Bigmaix. I am REALLY glad for all of you guys that are here with me. It would be pretty lonely otherwise.....and.....I get a lot out of all the posts that others put up.....they make me think about things......and see things.....from a different perspective. When you boil it all down......that is what WE ALL gain from this board......it helps to crystalize our thinking and makes us think. For example.....I probably would have never considered buying TESLA if I had not come to this board and run into TomB16. His discussion and thinking about TESLA got me started thinking and reading about it. SO....thank you TomB16.

As to your question:

"I have a question. When you say start at "0", does that mean take gains out or redistribute equally? I guess I am asking, how do most do with their profits/gains?"

When I say we get to start the new year at "0" what I mean is the markets will start on the first market day of the year at a total return for the year of "0". It will be a FRESH START for the averages. At the end of that first day we will be off and running with either a gain or a loss........for the DOW, SP500, and NASDAQ........ and we will go from there through the rest of the year.

For me.....once the markets close tomorrow.....I will calculate my gain for the year in my stocks. I will simply note it mentally and I will post it on here. For my mutual funds.......I will write down in my simple little chart that I keep for every year the total return for the year for each of my two funds.......SP500 Index Fund and Fidelity Contra Fund. I highlight.......in blue..... the total return for any fund that gains at least 10% for the year.......I put a little asterisk by the return of any fund that beats the SP500 for the year.......of course since the SP500 Index Fund always equals the SP500 it always gets an asterisk. At that point my record keeping will be done.

Once I do my little calculations and record keeping.....outlined above.....I MENTALLY am done with 2020.....whatever the results are they are in the PAST. I am a FORWARD LOOKING investor....the past is over with and LOCKED IN.....so I mentally move on.

As to TAKING PROFITS or RE-BALANCING......NO I do not do either. I.......ALWAYS......let the stocks and funds RUN. I do not take profits and I never re-balance. I DO NOT take gains out and do not redistribute in any way. The ONLY time I sell a position is when I am cashing it in due to poor performance. Once in a while I might take some money out of the funds to buy a NEW stock position.......BUT....being a long term fully invested......all the time investor.....I try to stick with what I have for the long term and not make changes.

This year has been a more active year than normal for me in my accounts. With the pandemic and a few new additions here and there. I sold off some old positions MMM and JNJ......and......put that money into new positions as well as scattering some of the funds among old holdings. I also added two positions....TSLA and SNOW.

So....I would say it has been an ABNORMAL year for me by being a little bit more active than normal. I anticipate making......hopefully......no moves next year....that is my preferred and normal course as a long term investor. I try to......."dance with the one that brought me".

 

TRAHN....that is a really NICE run of successful trades........well done.

 

It is a RAINY COLD New Years Eve here. The markets are not much better......another BLAH day. NOT exceptionally bad.....just the continuation of the December blah's that we have seen all month. We DEFINITELY DID NOT see a Santa rally this year.....not that it means anything for the January markets. It is OBVIOUS that the BIG market driver going into January will be the Georgia Senate elections. I suspect they will set the tone for the winter and spring.

We are already seeing a REVIVAL of the Bully Pulpit NEGATIVITY.......once again.......that we saw during 2009 to 2017 time span. IF........(unknown at the moment)......this continues into the year and becomes the norm......it will DEFINITELY impact the stock markets. ATTITUDE and PUBLIC COMMENTS by leaders matter.........BIG TIME.

I was looking at SNOW a little while ago. It has FALLEN by about $100 per share from a high of about $390 on December 8, 2020 to the current price of about $292. LUCKILY......I STILL have a gain of about 26.8%.......having purchased at $230. This drop is NOT unexpected........since the IPO LOCK-UP partly expired on December 15, 2020. You can see the impact of this by looking at the chart.

(from the article below)

• "Employees can now (December 15, 2020) sell up to 25% of their vested options and shares subject to vested options. As of July 31, this represented up to 11,295,695 shares.
• Non-employee shareholders can sell up to 25% of their vested options once SNOW has traded at more than 133% above the $120 IPO price (or $159.60) for 10 days of a 15-day trading period following December 14. Snowflake has easily beaten that milestone. This expiration represents up to 37,904,494 shares."

The FULL LOCK -UP will expire on the second trading day after the second public quarterly report in March. This event in March will take the free float from 32.2 million shares to the full 345.8 million shares. At that point the stock will trade without any restrictions. NOT necessarily a bad thing.....and NOT necessarily a negative. I suspect that most of the sales are happening now for tax reasons....due to the threat of the new Administration to raise taxes. Many of the early shareholders and employees are taking advantage of the early 25% lock up expiration to bank some cash and lock in some money........BUT.........I suspect many will let the remainder of their share balances ride going forward. After March the stock will settle into a NORMAL market driven trading range.......whatever that is. ALL OF THIS.......is NOT unexpected and is NORMAL for an IPO. SO...I have no doubts about holding this company for the long term as a speculative holding.

https://seekingalpha.com/news/36440...-expiration-which-includes-up-to-25-of-vested

 

HERE.....is some MORE good news for 2020 and the SP500:

S&P dividend payments to investors hit record in 2020 despite virus hit

https://www.reuters.com/article/us-...ecord-in-2020-despite-virus-hit-idUKKBN29421J

(BOLD is my opinion OR what I consider important content)

"NEW YORK (Reuters) - Dividend payments to investors in the S&P 500 rose to a new record in 2020, despite the challenge posed by the coronavirus pandemic, according to research from S&P Global.

Dividends payments rose 0.7% to $58.28 per share from the previous record set in 2019, according to S&P Global.

A record dividend payment in the first quarter of 2020, and a stronger-than-expected payment in the fourth quarter led to record payouts to investors, the ninth straight annual record, according to research from Howard Silverblatt, senior index analysts for S&P and Dow Jones indices.

While the S&P 500 index hit its lowest since 2016 in the early stages of the coronavirus pandemic, the U.S. stock index has since reached record highs.

For 2021, Silverblatt currently sees dividend payments setting its 10th consecutive record year, up 4.2% over 2020, he said. But for the recent addition of Tesla to the S&P 500, which does not pay a dividend on its common stock, the increase would have been 5.9% without Tesla, he said.

With cash earning next to nothing, given U.S. interest rates, and Treasury yields near record lows, robust dividends is another factor boosting the allure of stocks for yield-starved investors.

The coronavirus pandemic jeopardized corporate dividend programs earlier this year as companies looking to preserve cash and fortify their finances, suspended or slashed dividends."

MY COMMENT

NICE. AND.....important for long term investors.........using the past 40 years of S&P 500 returns......the percentage of returns from reinvesting dividends is 75%. Reinvested dividends over the long-term is part of the first and most stable way to make money in stocks. The S&P 500 index has risen to 17.9 times its 1980 value, but with dividends reinvested, $100,000 would have grown 52.9 times to $5,285,910.

I......personally.....ALWAYS reinvest all dividends and capital gains in funds and ALL dividends in stocks. THIS is how you achieve the historic COMPOUNDING that is.....in my opinion....the PRIMARY reason to own stocks and funds as a long term investor.