The Long Term Investor

gtrudeau88

Why would I care if I am......beating or not......the SP500.....3.5 months into a year. I dont invest for three months....I invest for years. I am FAR above the SP500 over the long term. There is no way...that I am going to chase after the SP500 based on 3.5 months of returns.

In addition......my GOAL is NOT to beat the SP500 EVERY year. My long term goal is to average a total return of.....at the minimum....10%....or more.....long term. I am very satisfied to have a GAIN of 8%+ for the first 3.5 months of a year.

I "TRY" to beat the SP500 every year as an....ASPIRATIONAL GOAL. How I do that is by.....DOING NOTHING....or...as little as possible. It is a SURE LOSERS GAME to start chasing returns and churning your account.

I could not care less what happens in the short term. That is NOT how "I" Invest.

 

YEAH...saying that a gain of 7.49% is....not great.....over a time span of 3.5 months.......is not something I would ever say. In general that is a very different take on investing than I have. I understand and accept that the long term gain of the SP500 is about 10-11%....per year. AND....the professionals....the finest money managers....will RARELY beat that over the long term.

To me....it is important for any long term investor to have a REALISTIC view of the markets.

 

AS to the above.....not intending to be critical......but....It is TOTALLY unrealistic to think that anyone is going to be successful on 90% of short term trades.....literally IMPOSSIBLE. Earning 15% per year trading or any sort of investing over the long term...."nearly" IMPOSSIBLE. Earning 20% per year over any sort of long term.....IMPOSSIBLE.

As to paying regular income taxes on short term gains.....NOT something I care to do.......EVER.

 

As to today.....another green day.....nine of the past ten market days. AND....I think for the first time that I can remember my gain for the day was an exact match of the SP500.......usually, I beat it or it beats me.

A VERY good week this week for the markets and REALISTIC investors.

DOW year to date +11.74%
DOW for the week +1.18%

SP500 year to date +11.43%
SP500 for the week +1.37%

NASDAQ 100 year to date +8.95%
NASDAQ 100 for the week +1.42%

NASDAQ year to date +9.03%
NASDAQ for the week +1.09%

RUSSELL year to date +14.57%
Russell for the week +0.86%

 

Here is how we ended the week.....next week....more earnings that will be SPECTACULAR.

Stock market news live updates: S&P 500, Dow set fresh record highs amid strong earnings, economic data

https://finance.yahoo.com/news/stock-market-news-live-updates-april-16-2021-221220587-221802203.html

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

"Stocks traded higher Friday in another record-setting day on Wall Street, with a batch of stronger-than-expected economic data and corporate earnings results helping fuel a risk rally.

The S&P 500 and Dow each rallied to record levels, with the latter extending gains well beyond the 34,000 level. The Nasdaq ended a choppy session slightly higher, with technology stocks steadying after recent gains.

"The Dow’s push through 34,000 is a signal that investor appetite for future growth prospects is spilling over into more value-oriented names," Peter Essele, head of portfolio management for Commonwealth Financial Network, said in an email. "The demand for industrials and more cyclically-oriented areas should continue as the vaccines take hold and earnings potentially come in higher than originally expected."

Treasury yields ticked up Friday morning after retreating on Thursday even amid a batch of estimates-topping economic data. Retail sales rose in March by the most since May 2020, fueled by a combination of stimulus spending and broadening business reopenings, and new weekly unemployment claims fell to a fresh pandemic-era low. First-quarter corporate earnings have largely topped already lofty estimates, with the big banks that reported this week posting rising sales and profits to coincide with the strengthening economic backdrop.

To many strategists, the stronger-than-anticipated quarterly reports this week are likely just the start of a slew of strong results in the coming weeks.

"We are expecting this economic recovery. It's only just starting to unfold," Seema Shah, Principal Global Investors chief strategist, told Yahoo Finance. "We think that as our earnings numbers go through, showing that really positive picture, confirming that positive picture, then that's going to give the market an additional 'oomph.' But certainly, the rotation that we've already seen over the last couple of weeks, couple of months, has still got further to go. And really equity markets are in a very good position given this very strong economic backdrop."

10:47 a.m. ET: Signs point to a strong April jobs report, extended pick-up in consumer spending: Bank of America
The recent strong batch of economic data will likely extend into next month, with the labor market and consumer spending rising in tandem with the ongoing economic reopening, according to Bank of America economist Michelle Meyer.

"The data flow has been tremendously strong," Meyer told Yahoo Finance on Friday. "We saw a dramatic increase in retail spend, the claims numbers are improving, confidence is picking up, manufacturing activity is still roaring ... So I think job creation should be quite robust in April."

Looking back at the March retail sales report out Thursday, which showed the strongest monthly increase since May 2020, "the stimulus payments contributed quite a lot to the gain," she added. "We think the next stage in consumer spending will be much more about the reopening, it will likely be more driven by higher-income consumers who have kind of unintentionally been saving because they haven't been living their lives in the typical way they have, so they haven't been spending as much on service activities."

"But it's not going to be the same type of pace as we saw from stimulus," she said. "Stimulus is a jolt. The reopening is much more of a steady upward pressure that will keep consumer spending running at a very healthy clip in our view."

10:16 a.m. ET: Consumer sentiment extends gains in April, reaching a one-year high: University of Michigan
Consumer sentiment increased in April over March as faster-than-anticipated vaccinations and easing social distancing standards helped lift consumers' outlooks on the economy.

The University of Michigan's preliminary April index of consumer sentiment showed an increase to 86.5 during the month, up from March's print of 84.9. However, this was below consensus expectations for a rise to 89.0, according to Bloomberg data.

"Consumers in early April reported surging economic growth and strong job gains due to record stimulus spending, low interest rates, and the positive impact of vaccinations," Richard Curtin, Surveys of Consumers chief economist, said in a statement. "The Sentiment Index rose to its best level in a year on the strength of recent gains in current economic conditions, while future economic prospects remained unchanged from March."

"The strength in current economic conditions reflects much larger than usual stimulus payments during the past year, and much larger than usual economic gains due to comparisons with last year's shutdowns," he added. "Other factors suppressed the pace of expected gains, including persistent concerns with vaccine safety as well as a surge in year-ahead inflation expectations to 3.7%, the highest level in nearly a decade."

8:30 a.m. ET: Housing starts surge by the most since June 2020 in March as warming weather fuels rebound
Housing starts jumped 19.4% in March over February, the Commerce Department said Friday, with inclement weather easing during the month and helping catalyze a resurgence in building activity. This marked the biggest monthly jump since July 2020, and handily exceeded consensus economist expectations for a rise of 13.5%.

The jump also sharply reversed February's 11.3% monthly decline. Housing starts in March rose to a seasonally adjusted annualized rate of 1.739 million, or the highest level since 2006. The vast majority of these were for single-family housings starts, which rose 15.3% in March. By geography, single-family starts in the South saw the biggest monthly gain at 8%.

Building permits, which signal future homebuilding, also rose more than expected, climbing 2.7% to a seasonally adjusted annual rate of 1.766 million. This followed a decline of 8.8% in February.

7:52 a.m. ET: Morgan Stanley posts record Q1 net income as stock and bond trading surges
Morgan Stanley (MS) extended a streak of strong bank earnings results this week, posting record net income in the first quarter as rising rates and strong demand for equity and fixed-income trading fueled results.

Adjusted earnings of $2.22 per share were well above the $1.68 expected, according to Bloomberg consensus data. Net revenue of $15.7 billion was also a record, and easily topped estimates for $13.95 billion and last year's first-quarter net revenue of $9.8 billion. Fixed income trading revenue jumped 44% to $2.97 billion, while equities trading revenue rose 17% to $2.88 billion.

“The Firm delivered record results. The integrated Investment Bank continues to thrive. We closed the acquisition of Eaton Vance which takes Investment Management to over $1.4 trillion of assets," CEO James Gorman said in a press statement. "Wealth Management brought in record flows of $105 billion. The firm is very well positioned for growth in the years ahead.”"

MY COMMENT

YES......EVERYTHING is coming in way better than expected. AND....the good news.....we have a long way to go before the economy is totally re-opened.

 

I like this little article for ANY type of investor. SOME good messages here.

5 things this index pioneer wants you to know about today’s investing challenges

https://www.marketwatch.com/story/t...nvesting-challenges-11618471396?siteid=yhoof2

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

"Early in my career, I was lucky enough to work on one of the first index funds. It was an incredibly exciting time, because before that the only equity option for investors was to pick stocks.

The academic evidence from people like Gene Fama — my graduate school adviser, who later would be recognized as a Nobel laureate — showed there was a better way to approach investing, but no one had put it into practice yet. Forty years later, more than half of the wealth held in mutual funds and ETFs is in index funds, and Dimensional Fund Advisors has grown to more than $600 billion in assets under management.

The investment management industry has made incredible progress driving down costs, encouraging diversification, and developing innovative solutions that benefit investors. These advances have been profound for investors — and I believe it’s just the beginning.

Yet despite all of the progress, I see investors falling into the same old traps. They might chase the latest fads and keep picking stocks. (Just in the past year, we’ve seen frenzies surrounding FAANG stocks, Tesla TSLA, +0.13%, and GameStop GME, -1.12% ). They might try to time markets. Too many people may have sold at the bottom of the financial crisis in 2009 or at the start of the coronavirus pandemic in 2020. These investors can hurt their chances of long-term success while adding to their anxiety.

Investing doesn’t have to be this way. We need to change the conversation so that people can invest better — and live better. As Dimensional celebrates its 40th anniversary as a firm, I’ve reflected on what I’ve learned over the years that I wish every investor could know:

1. Gambling is not investing and investing is not gambling: Gambling is a short-term bet. If you treat the stock market like a casino, and you’re picking stocks or timing the market, you need to be right twice — in an aim to buy low and sell high. Fama showed that it’s unlikely for any individual to be able to pick the right stock at the right time — especially more than once.

Investing, on the other hand, is long-term. While all investments have risk, there are things you can do as a long-term investor to manage those risks and be prepared. As my dear friend and Nobel laureate Merton Miller said, “Diversification is your buddy.” Investing, to me, is buying a little bit of almost every company and holding them for a long time. The only bet you’re making is on human ingenuity to find productive solutions to the world’s problems.

2. Embrace uncertainty: Over the past 100 years, the U.S. stock market, as measured by the S&P 500 SPX, +0.36%, has returned a little over 10% on average per year, but hardly ever close to 10% in any given year. The same is true of dozens of other markets around the world that have delivered strong long-term average returns. Stock market behavior is uncertain, just like most things in our lives. None of us can make uncertainty disappear, but dealing thoughtfully with uncertainty can make a huge difference in our investment returns, and even more importantly, our quality of life.

The way to deal with uncertainty is to prepare for it. Without uncertainty, there would be no opportunity. Risk and expected returns are related, which means you can’t have more of one without more of the other. Make the best-informed choices you can, then monitor performance and make portfolio adjustments as necessary. Come up with a plan to get back on track in case things don’t go as expected. And remember, you can’t control markets, so don’t blame yourself for results outside your control — try to relax knowing you’ve made the best-informed choices you can. A trusted financial adviser, a fiduciary who puts your interests first, can help you cultivate this sort of discipline and long-term perspective.

3. Implementation is the art of financial science: I was compelled to approach investing differently by the research Fama and other leading academics were doing to better understand markets and returns. There’s general agreement on what financial science tells us, yet so much can be gained or lost in application. Just as some sports teams can consistently execute their strategies better than others, investment professionals can consistently add value by dealing better with market mechanics.

At Dimensional, Bob Merton, our colleague, and Myron Scholes, an independent director of the U.S. mutual funds, were recognized as Nobel laureates for their options-pricing model, which shows that flexibility has value. Great implementation requires paying attention to detail, applying judgment, and being flexible.

4. Tune out the noise: If an investment sounds too good to be true, it probably is. When people ask me if I’m investing in the latest shiny investment idea, I tell them, “If I don’t understand something, I don’t invest in it.” That’s because I’ve seen a lot of fads come and go.

TV pundits handing out stock tips? Friends letting friends in on their next big investment? I see these more as entertainment than information. Stress is induced when people think that they can time markets or find the next winning stock, or that they can hire people who can. There is no compelling evidence that professional stock pickers can consistently beat the markets. Even after one outperforms, it’s difficult to determine whether a manager was skillful or lucky.

The good news is you can still do well without having to find what markets might have missed. While markets are unpredictable and may even seem chaotic at times, they have an underlying order. Buyers and sellers come together and trade, which is the activity that sets market prices. Unless each side agrees to a price, they don’t trade. New information and expectations about returns are quickly incorporated. Consistently finding big winners is difficult, but everybody can have access to the expected returns that a diversified, low-cost portfolio can generate.

5. Have a philosophy you can stick with: It can be difficult to stay the investment course during periods of extreme market volatility. At the end of March 2020, the S&P 500 was down almost 20% for the year. Record amounts of money exited from equity mutual funds and went into money market accounts. Those investors who stayed out of the equity market missed out on the subsequent 56% gain in the S&P 500 over the next 12 months. It serves as an example of how important it is to maintain discipline and stick to your plan.

By learning to embrace uncertainty, you can also focus more on controlling what you can control. You can make an impact on how much you earn, how much you spend, how much you save, and how much risk you take. This is where a professional you trust can really help. Discipline applied over a lifetime can have a powerful impact.

MY COMMENT

The concepts in the above article that.....along with.....long term investing and avoidance of market timing and trading....that will lead to investing success over a lifetime are:

DISCIPLINE
FOCUS
PREPARATION
IMPLEMENTATION
JUDGEMENT
ATTENTION TO DETAIL

 

LOL.....I shine my own shoes. BUT.....I understand EXACTLY the point of your post roadtonowhere08.

 

Amen to the above. In fact....it is very rare......as is the ABILITY to "actually" see REALITY. Both can be a CURSE at times......but in business.....a BLESSING.