Good morning & happy Monday!
“Love is patient, love is kind. It does not envy, it does not boast, it is not proud. It does not dishonor others, it is not self-seeking, it is not easily angered, it keeps no record of wrongs. Love does not delight in evil but rejoices with the truth. It always protects, always trusts, always hopes, and always perseveres. Love never fails.” – 1 Corinthians 12: 4-8
One of the most beloved passages in the Bible is this passage about love. I strive to live my life by such a standard, obviously I fall very short of that far too often.
I was thinking about what we all do for love. Many times we do things we would rather not do for those we love.
For example, my 7 & 9 year-old sons love camping. The idea of packing, loading up the van, paying a campsite fee, setting up my own shelter, cramming into a small confined space, eating lousy food, sleeping on the ground, tearing the shelter down, re-loading the van, then unpacking the van at home does not fall into the category of things I love to do. But .. I do it … because I love my boys.
We recently went to the beach and my Tampa Bay Lightning were playing a playoff game at the same time as sunset. My wife wanted to make sure we enjoyed time at the beach, so I (reluctantly) chose to watch the sunset instead of watching the Lightning game. Now that is love ????
I know you have countless similar stories of things you have done for those that you love.
That’s the thing about love … it oftentimes involves sacrifice, doing things we would rather not do.
So what in the world does this have to do with investing? Well, I’ve been in this line of work for nearly 23 years, and I have yet to meet a single person who loves market volatility. I have never heard someone say “I’m so glad the value of my stock portfolio is down.” We don’t operate like that because we are human beings … we hate to see the downs that sometimes occur with investing.
But, because we know we are investing for our future and the future of those we love we understand that volatility is part of the game … we know it’s how we get to where we need to go … so we stick with it.
As a sports fan I love to see a good game … a game that goes down to the buzzer. But, if I’m watching my team I would much rather see a blowout with my team easily cruising to victory. If the Bucs win 72-0 I would consider that an excellent game ???? But honestly, it’s the games that are much closer that tend to be memorable.
I was born January of 1980. The lifetime average of the S&P 500 in my lifetime (through 12/31/2020 with dividends reinvested) is 11.83%. But that was anything but a smooth, gentle return. Heck, the month after I was born (February 1980) the S&P 500 was negative 8.78%. It was negative again 1.16% in March 1980. Looks like the stock market was not too excited to welcome me to the world ???? If I invested $10,000 on 1/1/1980 it would have been worth $9,412.55 by 3/31/1980. If I was only focused on short-term pain and bailed from my investment strategy, I would have never realized the long-term benefits of my investment. But staying focused on one’s goals would prove to be a wise strategy … a $10,000 investment in the S&P 500 1/1/1980 would be worth $978,858.45 as of 12/31/2020. (source: S&P 500 Returns since 1980 (officialdata.org))
We are investing IN companies (stock ownership) FOR the people we love.
As we continue on our investing journey, I would encourage all of us to never lose sight of WHO we are investing FOR, not just WHAT we are investing IN. When we stay focused on the WHY we invest the likelihood of our investment success dramatically increases because we are less apt to make short-term decisions for the people we have long-term love for.
Make it an amazing week ahead!