Old Ford Model A’s are not fast. Well, stock one’s are not fast, but they got the job done. Henry Ford had a great idea when he put Fords on the road. The Model T was first, and it’s solid dependability, and accessibility, allowed people to move farther in life than they had before.
Later, the Model A came along. The Model A was an improvement on the Model T, and once again folks were going farther than they ever had; not fast, but further.
Investing is like driving a Model A. Progress is made slowly, but if the Model A is sound, one can go far. The same thing can be said about a good investment “vehicle.” If it is sound, progress will be made. My “vehicle” is the stock market.
Now I know it’s not been the strongest in the last few months, it’s been up and down, but so can any other route towards progress. Although I live in Texas, where we mostly have flat land, there are areas that can be quite hilly. One just has to be patient and press on.
The stock market is a sound “vehicle,” as history has shown. Oh, it’s not for the short haul, that’s for sure, but if one were to look at the history, one would see that the market growth is primarily positive.
Market Watch’s “8 Lessons From 80 Years of Market History” points out:
- Market history, in 10 year increments, are mostly positive.
- The market has experienced decades of positive returns.
- The most consistent high performance “winner” has been small-cap value stocks.
- The first decade of this century has been considered a decade of loss, largely because of large-cap growth stocks and a couple of strong bear markets. Despite this points, investments spread across the 4 asset classes wound with an average gain of 6.7%, after all.
Although the market appears to be falling, most expectations are for it going back up again, as it historically has done. A great point is make at the U.S. News and World Report web site Money, in the article “Is the 7 Percent Return for Stocks Extinct?”
“If stocks could generate 6.6 percent a year for over two centuries that included a couple of world wars, a U.S. civil war, a Great Depression, and too many financial panics to count, why would you expect lower returns in the future? “
My thoughts exactly, and that’s one of the reasons why I believe that investing, the Model A Way, is the way to go. Long term, slow, but steady growth. As for the ups and downs of the market, sometimes the old Fords had to be driven up hills backwards, to keep pressing on. In doing so, they got the people where they wanted to go. The stock market can do that to, but you just have to be patient and “Drive It” like a Model A.
Update,” October 11, 2017
I just looked into our Fidelity portfolios and was delighted to see that our largest has grown 30% since we moved the majority of our investments under Fisher Investment’s management, using Fidelity for the transactions. We moved the funds in March and my calculations are from the March 31, 2013 statement until checking the fund today.
I’m pretty pleased with how things have panned out. Prior to our moving our funds I didn’t really keep up with the numbers other than how much we had at the beginning of the year to the end.
Neat thing about where we’re at now? We’ve been drawing $2,000.00 for our portfolio since the later part of 2015, to supplement my retirement income. So, we’ve had an average growth of 30% with us pulling money. Not bad, I think.
The first four years I worked at my employer I participated in the employee stock purchase program, but I always sold the stock right after I got it every six months. I locked in at minimum a 15% gain (sometimes much higher) by doing that, but the past two years I haven’t sold a share. It’s been fun to see how stocks can build up over time. Now that I have 100+ shares, I am seeing a material impact from dividend payouts. It’s still a small amount, but over time it will keep growing and growing. Investing is definitely a long-term game.
Hey, DC! Thanks for popping in.
Sounds like you’ve been doing good. I like the market, knowing that volatility provides the ups as well as the downs. The ups have historically been better than the downs. It’s interesting to check our Fidelity portfolios and see the growth. Of course, sometimes I see some losses. Despite those, we’re still ahead.