“We do not have, never have had, and never will have an opinion about where the stock market, interest rates or business activity will be a year from now.”– Warren Buffett, the world’s most admired, least imitated investor, in his annual letter to shareholders 30 years ago, dates February 28th, 1989.
– On February 28th, 1989, the Standard & Poor’s 500-Stock Index closed at 288.26. On December 31st, 2018 it closed at 2,507, fairly close to nine times where it was on the day of Buffet’s letter. Of course, this would be ignoring dividends.1
– The cash dividend of the S&P 500 for the full year 1989 was at $11.73. For the full year of 2018, it was at $53.61, a bit more than four and a half times what it was in 1989.1
– To get a sense of how these increases compare to inflation(how everything you buy goes up each year), note that the Consumer Price Index stood at 122 in February 1989. In December 2018 it was 253, having slightly more than doubled in the interim.1
When will we ever learn? It was never about timing the market, it is always about TIME IN THE MARKET.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Securities offered through LPL Financial, Member FINRA/SIPC