Winnie the Pooh probably isn't the investment guru that first comes to mind when you think about Wall Street. And yet he has offered some pretty sage investing advice: "Doing nothing often leads to the very best of something." The history of investing over the past 50 years very clearly shows that this fictional, honey-loving bear could be on to something. Here's why.
Turning to a real person, iconic investor Warren Buffett, the former CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), has said that "Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The issue of temperament is where Buffett and Pooh intersect. That's because the S&P 500 index's (SNPINDEX: ^GSPC) history shows that Wall Street switches between bull and bear markets in a zigzag fashion, while generally moving higher over time. The chart below shows that simply buying and holding the S&P 500 index would have yielded a positive long-term outcome if you had the temperament to do nothing while it gyrated in the short term.
In fact, Warren Buffett has actually suggested that most investors would be better off just buying the S&P 500 index and... doing nothing. That's not entirely true; Buffett would likely recommend continuing to regularly buy an S&P 500 index ETF, such as SPDR S&P 500 ETF (NYSEMKT: SPY) or Vanguard S&P 500 ETF (NYSEMKT: VOO), regardless of market conditions.
#buffett #pooh #wall
Turning to a real person, iconic investor Warren Buffett, the former CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), has said that "Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing."
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
The issue of temperament is where Buffett and Pooh intersect. That's because the S&P 500 index's (SNPINDEX: ^GSPC) history shows that Wall Street switches between bull and bear markets in a zigzag fashion, while generally moving higher over time. The chart below shows that simply buying and holding the S&P 500 index would have yielded a positive long-term outcome if you had the temperament to do nothing while it gyrated in the short term.
In fact, Warren Buffett has actually suggested that most investors would be better off just buying the S&P 500 index and... doing nothing. That's not entirely true; Buffett would likely recommend continuing to regularly buy an S&P 500 index ETF, such as SPDR S&P 500 ETF (NYSEMKT: SPY) or Vanguard S&P 500 ETF (NYSEMKT: VOO), regardless of market conditions.
#buffett #pooh #wall
3 days ago
