The Long Term Investor

HERE is a real world lesson in the FAILURE of MARKET TIMING.

This Fund Followed the Rules. That Was the Problem
Pacer Trendpilot US Large Cap ETF has tried to time the market. It hasn’t gone well.

https://www.morningstar.com/funds/this-fund-followed-rules-that-was-problem

"The exchange-traded fund had gained around 8% annually from its June 11, 2015, inception through May 13, 2025, which was nearly 5 percentage points per year less than the S&P 500‘s return."

THE CONCLUSION:

"Takeaways

There’s no need to belabor the obvious point—market-timing is difficult to impossible to pull off.

These ETFs take a simple rules-based approach to the endeavor, which I suppose is preferable to a system that is more purely ad hoc and therefore prone to emotional impulses. Nevertheless, the market doesn’t bend to maxims like “get out when the index breaches its moving average and get back in when it’s back above it.” Regimes change, and what might once have been a reliably clear signal can be quickly reduced to noise.

There’s another lesson in these ETFs’ improbable popularity: Some people really hate getting caught in deep market downdrafts. And so, they’re more open to stories like “you get most of the upside but avoid the brunt of selling” than would stand to reason when you consider the dismal results that market-timing strategies like these have produced.

It’s unfortunate, as investors here would have almost certainly been better off diversifying across stocks and bonds and leaving the portfolio untouched apart from rebalancing. But in another way, it serves to remind us why investors have tended to earn a higher return in stocks than bonds—loss aversion is powerful, and the stock market’s inducement has been the “risk premium” it has offered investors over the long haul. Were it otherwise, stocks would probably be pricier and therefore have lower potential future returns."

 

WELL........the NASDAQ is now GREEN. UnitedHealth is killing the DOW. The SP500 is moving toward flat.

BUT....it is a low energy day in the markets.

 

Today was one of the greatest FANTASY driven market sell-offs I have seen in a long time. The concern about the deficit and tax bill is just plain short term market PANIC.

Actually I dont think there was any PANIC at all......simply a massive amount of AI trading and market short trading....by the speculators and day traders....driving the market down for a day or two. I see ABSOLUTELY NOTHING of any concern to a long term investor.....or for that matter anyone that is longer than a week or two in the markets.

I am not saying the markets will be up in a week or two...but...the issues today will be forgotten.

I was in the RED today with a single UP stock....GOOGL. BUT....I did beat the SP500 by 0.31% today.

Just a SILLY market day today.

 

Dow slides more than 800 points as spiking Treasury yields and deficit fears spur a sell-off

https://www.cnbc.com/2025/05/20/stock-market-today-live-updates.html


The ultimate short term....BS....over nothing. I see the dirty little fingers of the day-trading (legal) market manipulators all over this drop today.....AI Trading Platforms trading the news.....and day-traders following along and speculating.

YAWN.

 

WELL.....we are starting the process of closing down a family corporation. Basically an oil and gas and land company that was started by my Grandfather. It than went to his five children.....my mom was one of the five. My sister and I own her original 60 shares jointly. The other shareholders right now are mostly my 13 cousins and the children and grandchildren of one that died.

We are trying to wrap up the company because we are all in our 60's and 70's and after our generation is gone it will be a nightmare to have the company split up between many, many, children and grandchildren and even great-grandchildren. Managing the company requires accounting, a CPA to file tax forms, etc, etc, even though there is usually minimal income....usually less than $1000 per year.

The company holds about 1000 acres of mineral rights and about 350 acres of physical land in the Permian Basin.

We decided about a year ago to wrap things up. We will try to sell off all the mineral rights first and than list the physical land. It is complicated since part of the land is owned as a 1/2 "undivided" interest along with other owners that we have no idea who they are. I assume they are now dead and their heirs may not even know about this land. We have paid the minimal property taxers for decades. It will probably require a Real Estate attorney to quiet title to the land or partition it so we can sell it with clear title.

Myself and one of my cousins as company board members are heading up the sale of the corporate assets and dealing with all the issues to wrap up and dissolve the company. We just got lucky with our first little parcel of mineral rights....we have a pending deal for those ten acres of mineral rights at $145,000. We have a professional "Land-Man" that is representing us on that deal. Once it is closed we will have him shop around the rest of the mineral rights.

Unfortunately, the rest of the mineral rights will have a lesser value. We are hoping that all the mineral rights and physical land will have a minimum value of at least $500,000. I would think that maximum value....if we got REAL LUCKY....would be $750,000.

Of course it will not be big money in the end. We will owe Capital Gains tax on all the assets. We will have legal fees and CPA fees to do the final tax accounting and deal with getting clear title on some of the land, etc, etc, etc. In the end....my sister and I as joint owners of 1/5 of the company might see a check for $100,000.....MAXIMUM....about $50,000 each. I expect the whole process will take 1-2 years.

Investing in stocks is so much easier than all the work it will take to realize this money.

 

You have got to be kidding....how much money has this company given up over the last five years with their.....TOTAL FAILURE.... policy of trying to sell direct to consumers that they started about five years ago. MANAGEMENT MALPRACTICE in action.

Nike will sell on Amazon for first time in more than 5 years

https://www.oregonlive.com/business...azon-for-first-time-in-more-than-5-years.html

BUT.....this company is still a disaster. Mostly due to embedded social and cultural policies and thinking that piss off half their potential customer base.....along with.....their INSANE decision to abandon the retail sellers and selling sites like Amazon.

 

I like this little article.

7 Attributes of The Millionaire Next Door

https://awealthofcommonsense.com/2025/05/7-attributes-of-the-millionaire-next-door/

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

"I first read The Millionaire Next Door a year or so into my first job.

I didn’t know a thing about what it takes to get wealthy so the book was eye-opening for me as a 20-something trying to figure out my career and finances.

The general thesis of the book is that the prototypical millionaire is not what you think.

They live below their means, prioritize saving over spending, don’t spend frivolously on luxuries, budget their money, think long-term and save/invest something like 20% of their income. The millionaires next door are disciplined with their money, are more likely to drive a Ford than a Bentley and avoid status symbols.

Half of them lived in the same house for more than 20 years and 80% of them were first generation affluent.

The one thing that really stuck out to me at the time was that most millionaires are self-employed or own a business. In fact, self-employed people make up less than 20% of the workers in America but account for nearly two-thirds of the millionaires.1

And it’s not flashy, high-tech companies. The two-comma club mostly owns and operates unglamorous yet steady, profitable businesses.

The book was originally published back in 1996.

Is it still true today?

When it comes to business ownership, yes.

The Wall Street Journal has a profile of the stealthy wealthy (aka the millionaire next door):

The largest source of income for the 1% highest earners in the U.S. isn’t being a partner at an investment bank or launching a one-in-a-million tech startup. It is owning a medium-size regional business. Many of them are distinctly boring and extremely lucrative, like auto dealerships, beverage distributors, grocery stores, dental practices and law firms, according to Zidar and Zwick.

Here’s the breakdown among the top 10%:


This group is also growing:

Their analysis of anonymized tax data from 2000 through 2022 suggests the importance of such business ownership to the U.S. economy has grown. The share of income that ownership generates has increased to 34.9% in 2022 from 30.3% in 2014 for the top 1% earners.

The number of such business owners worth $10 million or more, adjusted for inflation, has more than doubled since 2001, to 1.6 million as of 2022.

This may seem like a pipe dream to a lot of people. Starting a business is hard. It’s risky. There are no guarantees it will work.

The best way to supercharge your wealth is to own equity. If you do so in a business you own or work at, that certainly helps. The next best thing is to own equity in publicly traded stocks.

The good news is that it’s never been easier to invest in the stock market. When The Millionaire Next Door was originally released, the authors noted that fewer than 25% of households owned stocks or mutual funds. Today, it’s more like 60%. That’s progress.

In the book, Thomas Stanley and William Danko lay out seven common denominators among people who successfully build wealth:


The world looks much different than when this book was first released. People probably spend more money than they used to, even the millionaire next door types. But building wealth still takes discipline, sacrifice and hard work.

I don’t see those attributes ever changing."

MY COMMENT

AMEN. This book is STILL the TRUTH. the simple key to it all....either business ownership or stock ownership....for the long term.

 

The news story of the day.

The House passed Trump's 'big, beautiful bill.' Here's how it affects taxpayers and businesses.

https://finance.yahoo.com/news/the-...fects-taxpayers-and-businesses-110041500.html

YAWN.

 

I dont know why this would be considered....."UNEXPECTED"....seems totally obvious to me considering the recent mortgage rates and everything we have been seeing in the housing market over the last 4-6 months.

US existing home sales unexpectedly fall in April

https://finance.yahoo.com/news/us-existing-home-sales-unexpectedly-140830244.html

 

REAL NICE long term rates available to investors looking to lock up a big yield on long term SAFE MONEY.......5.1% on 30 year TREASURIES.

Bond market jitters rise on 'narrative shift' from positive tariff news to mounting US debt crisis

https://finance.yahoo.com/news/bond...ews-to-mounting-us-debt-crisis-080046279.html

 

Markets are MIXED with MILD gains in the SP500 and NASDAQ.

Here is the market today.

S&P 500 ticks higher led by tech shares, shaking off rate fears

https://www.cnbc.com/2025/05/21/stock-market-today-live-updates.html

 

I have a nice gain right now with five stocks GREEN and four stocks RED. NVDA and PLTR are among my green stocks which is good for me.

My account is now going to have to just get along for the rest of the day without me. I have to get ready to take off for the studio. I will get home about 5:00PM....so will miss the entire market day. NOT a big deal of course....there is nothing I would do anyway other than watch it unfold.

As usual......MAKE ME SOME MONEY.

 

I had five stocks in the green today and they were strong enough to give me a GAIN for the day. I also beat the SP500 by 0.48% today.

Last day of another week tomorrow.

 

Short answer.....NO. I dont let my politics or other personal BIASED views influence my investing. AND....with PLTR I now have way more than my free shares and I have it in every one of the six portfolios that I manage.....and in each it is the second largest position by value....with how it has grown.

I do NOT push this stock at all for others.....because it is still a very young and aggressive company that has RISK.

As I said once before.....there is nothing wrong with an investor refusing to invest in some company or business if their personal views do not allow them to do so. Everyone has to make choices on where they invest and their personal views are a legitimate factor to take into account.

I personally have a similar view to yours of PLTR with George Soros and what he and his family do around the world with their money. If he owned some big market dominating company I would NOT invest in it. I think he is PURE EVIL.

I remember back when my mom's and my account had a lot of tobacco in the form of Phillip Morris. There were people back than that would not own tobacco due to personal feelings.....I am sure there still are now. As I said....for any individual this is a LEGITIMATE factor.

 

The markets are TOTALLY OBSESSED with short term news items now. It has been this way for a while now and it will only get worse with the current and future media environment. We see that with all the RED today.

Speaking of AI....Road....I am more concerned that out of control AI TRADING will kill the markets....even the long term. It already totally engulfs the short term day to day markets and I believe is market manipulation. As with everything......it will only get worse.

 

I still remember back when I first learned of the rule of 72's. I STILL consider it the foundation of ALL long term investing and the mind set of long term investing. Being able to PREDICT and VISUALIZE what a small amount of money invested NOW will grow to in the FUTURE....is a huge tool to motivate investing and saving.

The Rule of 72: How to Double Your Money in 7 Years
While the rule of 72 is a useful rule of thumb to estimate investment returns, using an online calculator or a compound growth formula may yield more accurate results.

https://money.usnews.com/investing/articles/the-rule-of-72

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

"Key Takeaways:

• The rule of 72 is a shortcut investors can use to determine how long it will take their investment to double based on a fixed annual rate of return.
• To use the rule of 72, divide 72 by the fixed rate of return to get the rough number of years it will take for your initial investment to double.
• You would need to earn 10% per year to double your money in a little over seven years.

Wouldn't it be great if you could quickly determine how much your savings could be worth in the future? Or how much you need to earn on your savings to reach a goal?

It's easy to set a savings goal but far less easy to know if you'll reach it. You could say "I want to have $1 million by age 65," but how do you know if you're saving enough to achieve that?

Luckily, there's a shortcut to estimate how much your savings could be worth in the future by using something called "the rule of 72," and the only math required is basic division.

What Is the Rule of 72?

The rule of 72 is a shortcut investors can use to estimate how long it will take their investment to double based on a fixed annual rate of return. You can also use the rule in reverse to determine roughly what rate of return you need to double your money in a given length of time.

Note that while the rule of 72 is a useful and easy rule of thumb, it doesn't yield the most accurate results. If you need a more precise estimate, consider using an online calculator or compound growth formulas in Excel.

The rule of 72 is "one of the simplest yet most powerful concepts in investment mathematics," says Brian McGraw, a senior wealth advisor at Hightower Wealth Advisors St. Louis. It lets you "quickly assess the potential of various investment opportunities without getting bogged down in complicated formulas."

The Rule of 72 Formula

A key benefit of the rule of 72 is its simplicity. The formula for the rule of 72 is:

72 / expected annual rate of return (R) = years to double your money (Y)

or

72 / R = Y

This means to use the rule of 72 all you do is divide 72 by the fixed rate of return to get the number of years it will take for your initial investment to double. For example, if your investment earns 6% per year on average, you would take 72 divided by 6 to determine that it will take 12 years for your money to double.

Here's how long it would take to double your money at various rates of return, according to the rule:

ANNUAL RATE OF RETURN (R)
YEARS TO DOUBLE (Y)
1%
72
2%
36
3%
24
4%
18
5%
14.4
6%
12
7%
10.3
8%
9
9%
8
10%
7.2

Based on the above, you would need to earn 10% per year to double your money in a little over seven years.

The true benefit of the rule of 72 is its ability to "illustrate the time value of money and the impact a given rate of return can have on future values," says Ronnie Gillikin, president and CEO of Capital Choice of the Carolinas.

It can shine a light on how investing too conservatively may be as detrimental as investing too aggressively.

For example, you may think you're better off with a reliable 2% return versus a less reliable higher rate of return. But as the rule of 72 shows, this is only the case if you're willing and able to wait 36 years for your money to double.

Even a "guaranteed" rate of return at low levels can be nothing more than "a guaranteed failure if it doesn't meet the objectives and needs for the portfolio," Gillikin says.

How Does the Rule of 72 Work?

The rule of 72 works for any investment size or rate of return. While the rule is most frequently used to solve for Y – determining how many years it will take to double your money at any plugged in rate of return – it can also be used to solve for R. In other words, what rate of return do you need to earn to double your money in a set number of years?

That's because, while the default equation of the rule is 72/R = Y, it can also be stated as 72/Y = R.

For example, if your goal is $1 million by age 65 and you are 35 currently, you know you have 30 years to reach that goal.

Based on the rule of 72, you can simply plug in the years and get your required rate of return:


72/Y = R

72/30 = 2.4


So if you have $500,000 saved now, you can theoretically afford to invest it fairly conservatively for a 2.4% rate of return and still reach your $1 million goal in 30 years without making any other contributions.

"The real value of the rule will show how important it is to start saving earlier," says Steve Azoury, a chartered financial consultant and owner of Azoury Financial. "Starting to save at age 22 versus age 29 could increase your assets twofold."

The question is, he says: How many doubling periods will you have in your life? The answer can reveal just how aggressively you need to invest to reach your goals.

Who Came Up with the Rule of 72?

The rule of 72 dates back to the 15th century. It was first described in 1494 by Italian mathematician Luca Pacioli in his book "Summa de Arithmetica." But Pacioli doesn't explain why the rule works or how it was derived, leading some to suspect it may have been discovered even earlier. It's sometimes erroneously attributed to Albert Einstein.

How Accurate Is the Rule of 72?

The rule of 72 is a simplified version of the future value formula, which calculates how much a sum of money will be worth in the future at a fixed rate of return. While a handy starting point, there are many limitations to the rule of 72:

• Limited accuracy range
• Assumes a constant rate of return
• Assumes annual compounding
• Doesn't account for taxes, inflation and fees
• Doesn't consider contributions or withdrawals

Limited accuracy range

The rule of 72 is the most accurate for rates of return between 6% and 10%. "At very low rates below 4% or high rates above 15%, the approximation becomes less reliable," says Nick Bour, founder and CEO of Inspire Wealth.

A more accurate version of the rule of 72 would be to use 69.3 instead of 72, but you won't get nearly as neat of numbers this way. You could also use the rule of 70, which is closer to the true time value of money, but not quite as messy as 69.3.

It's also less effective over long time periods. "The longer the time period, the more potential errors can accumulate in the rule of 72 estimation," Bour says.

Similarly, attempting to use it on an investment you want to double in less than a few years is likely to result in an unreasonable growth rate.

Assumes a constant rate of return

Another limitation of the rule of 72 is that it's based on a constant rate of return each year, which seldom reflects reality.

"A rate of return is actually impossible to predict," and "investments are never that consistent in real life," Azoury says. "Unfortunately, the rule of 72 doesn't factor in losses, and rates of return can actually change each and every year."

Market volatility can drastically affect the actual time it takes for your money to double. "Two investments with the same average return but different volatility patterns may have very different end results," Bour says.

The rule of 72 becomes less accurate with more volatile investment returns, which can be seen in areas like emerging-market stocks, McGraw says.

Assumes annual compounding

The rule of 72 formula assumes an annual rate of compounding. This would mean that your earnings are only reinvested once per year, which is not the case with most investments.

"Investments with more frequent compounding will double faster than the rule predicts," Bour says.

Doesn't account for taxes, inflation and fees

Long-term investors need to consider the impact of inflation and taxes on their future returns, Gillikin says. Inflation can erode your investment returns as fast as you accumulate them.

You can see just how big inflation's impact is on investment returns by using the rule of 72 in reverse, Azoury says. If a 4% positive return doubles your money in 18 years, a 4% annual inflation rate will halve your investments over the same time period. If inflation is 2% instead of 4%, it will take 36 years for your money to be reduced by half.

Fees and taxes will also take a bite out of returns. "An investment that charges, say, 3% annually will reduce the returns and thus the time it takes for the investment to double," Azoury says.

Doesn't consider contributions or withdrawals

Lastly, the rule of 72 doesn't account for additional contributions or withdrawals. It's only effective for calculating the returns on a single, lump-sum investment.

If you're adding to your investments regularly – as you hopefully are – your portfolio may grow much faster than the rule predicts. Likewise, any withdrawals you make will hinder your returns, which is why you should avoid tapping into your retirement savings early.

Alternatives to the Rule of 72

While the rule of 72 can be a helpful guide, don't rely too heavily on its predictions because there are no guarantees in investing. Even the most detailed return projections are just projections.

Spend enough time investing, and you're bound to hear the phrase, "past returns are not indicative of future results." So even if your investment yielded a compound annual growth rate of 6% over the past 50 years, there's no telling what it will do next year.

As fun as all this math is, an easier way to see how much your investments will grow over time is to use a free online calculator like the savings calculator offered by U.S. News. The beauty of this calculator is it allows for future monthly contributions as well, so you can see how increasing your savings rate will impact your nest egg over the long run."

MY COMMENT

A CLASSIC investing tool. But like all tools it depends on how it is used. It will tell you time to double your money but will not tell you what stocks or funds to invest in to produce the return you need.

YOU....still have to pick good, long term, investments that are RATIONAL and REALISTIC and fit your RISK TOLERANCE.

 

So true....as a general investing observation.

The Hardest Day to Invest is Always Today

https://www.capitalallocators.com/the-hardest-day-to-invest-is-always-today/

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


"One of my earliest manager meetings was with Jeremy Grantham in 1992. He made a compelling case that the bull market of the 1980s had run its course. Around the same time, I learned about Warren Buffett and considered buying Berkshire Hathaway stock. At $12,000 per share, BRK.A was beyond my means.

I assumed I was too late – the easy money had already been made. But in hindsight, I was standing at the starting line of one of history’s greatest bull markets.

Over the past four years, we’ve hosted Capital Allocators University (CAU) six times (our next cohort is July 7th in NYC). In each session, I presented a slide titled, ‘The hardest day to invest is always today.’ And every time, new market conditions made that statement ring true.

Today is no exception. We face heightened uncertainty from tariffs, economic conditions, valuations, private market liquidity, and crowding in alternatives. Even leading macro strategists have begun to question the durability of U.S. exceptionalism on the Capital Allocators podcast.

When stocks, bonds, and alternatives appear unattractive, what’s an investor to do?

I’ve been thinking about bull and bear cases across asset classes. None of these observations are earth-shattering, but collectively, they illustrate a complex investment landscape with few compelling opportunities.

U.S. equities boast strong, resilient mega-cap companies, a lagging cohort with catch-up potential, and implicit policy backstops from the Fed and Treasury. But they face headwinds from high valuations, rising government debt, and escalating economic and geopolitical risk. The familiar comfort of buying the dip no longer feels reliable.

International developed markets appear cheaper than the U.S., but contend with structural inefficiencies, political instability, and sluggish innovation. Broad exposure remains hard to justify outside of select markets like Japan.

Emerging market equities offer compelling valuations and promising long-term growth fueled by favorable demographics. Still, they remain vulnerable to political volatility, currency risk, and shifting support in a multi-polar world.

Private equity, especially in the middle-market, purports to offer higher long-term returns. However, constrained liquidity, lengthening holding periods, and valuation uncertainty make capital commitments less straightforward.

Private credit has become the alternative of choice. It offers attractive yields, shorter durations, and adaptability to a higher-rate environment. But massive inflows have compressed spreads, raised concerns around underwriting standards, and left questions about resilience in a tougher economy.

Venture capital benefits from relentless innovation, particularly in AI. Yet intense competition, limited access to top deals and managers, and constrained exit environments temper its appeal.

Real estate remains deeply unloved, despite potential tailwinds from housing shortages and a commercial recovery. Its absolute return prospects are modest, and uncertainties around work patterns and interest rates continue to cloud the picture.

Infrastructure, especially in high-demand areas like data centers, benefits from inelastic demand and government support. But like real estate, infra faces limited upside and lingering macro risk. In a tougher return environment, relative strength is insufficient to meet objectives.

So where do we turn? The most compelling risk-adjusted opportunities may lie in the most overlooked corners of the market: real estate, emerging market equities, and middle-market buyouts. (Though it’s hard to call any part of private equity ‘overlooked’).

Beyond that, opportunities lie in idiosyncratic niches and bottom-up concentration, both of which are capacity-constrained and demand exceptional skill and judgment.

Even so, this feels like one of those moments when the risk of something going wrong is just around the corner. Or maybe, as history has shown time and again, it’s a moment full of unexpected opportunities.

The only thing I know for sure is this: the hardest day to invest is always today.

MY COMMENT

I post the above for what I have put in BOLD.....not the investing category commentary. This little concept.....the hardest day to invest is always today.....is a constant barrier to people investing and saving. There will ALWAYS be some reason to wait or not do it.

This concept is basically the basis for MARKET TIMING. It is also the rationale for simple long term investing.....by being fully invested all the time.

 

I am simply IGNORING.....the short term today....which means what the markets are doing on this single day. MEANINGLESS and I will not waste time on meaningless "stuff".

 

A day or so ago....existing home sales...."UNEXPECTEDLY"...went down. Today new home sales...."UNEXPECTEDLY".......went up. Funny how.....as usual.....the experts are just about ALWAYS wrong.

US new home sales unexpectedly rise in April

https://finance.yahoo.com/news/us-home-sales-unexpectedly-rise-141854651.html

No wonder investing is so confusing and difficult for new investors to figure out.