“Nobody knows nothing.” Theses are the words that Vanguard founder, Jack Bogle, heard from a financial services industry veteran when Mr. Bogle first started in the industry. The purveyor of these words told Mr. Bogle that if he remembers this phrase, he’ll do well in financial services. The concept that “nobody knows nothing” had a profound effect on Mr. Bogle, thus he still quotes this phrase today. Well, I’m certainly among those who know nothing. Since nobody does well at forecasting the economy or markets over longer time horizons, I don’t even try. Since only about 5.00% of Wall Street professionals are able to beat the indexes over long periods of time by successfully picking stocks or timing the markets, and since it’s impossible to identify these superior managers ahead of time, I don’t pick stocks or time the markets either. Nor do I attempt to identify those managers who can do so successfully! It’s futile. If you’re doubtful of my assertion, please read my new book, The Best Kept Secret on Wall Street. I’ll even send you a free copy if you contact me and request one! But assuming capitalism persists and that the United States of American and many other developed nations still exists throughout the remainder of your lifetime, I think it’s fairly safe to assume that the financial markets, especially the stock markets which represent these developed countries’ economies, will continue to grow. Will there be interruptions? Absolutely. Will the future economic contractions and market pull backs be scary? You bet they will. But absent a doomsday scenario, your diversified portfolio of stocks and bonds will continue to grow over the long-term! There are no certainties in investing, and, of course, you could lose everything if there is a cessation of capitalism and the U.S. goes away. So if you have faith that the end of the world is not imminent, don’t listen to any of the talking head on Wall Street (or anywhere in the financial services industry) or the financial news media. But do invest with confidence and with a long-term horizon, and chances are very good your diversified investment portfolio will appreciate handsomely. Invest in Wealth! We’re available to start a dialogue with you at any time. Stuart McGehee, founder and principal of Pacific Northwest Asset Management, LLC.
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