Sunday, November 1, 2020

Stonks go up

"Stonks go up" is today's meme phrase of what actually is a great strategy. The better sounding version goes like, "markets climb a wall of worry (and therefore you should stay invested)."

The best way to build wealth is to hold assets that compound wealth over time. Cash does not compound wealth over time. I too get drawn into thinking about rich valuations and near term risks and sometimes it doesn't feel great to be 100% invested in stocks. But the truth is that over the next 40-50 yrs, stocks will all certainly make thousands of new all time highs. If stocks return 9% a year for the next 40 yrs with a 2% dividend yield, then an investment in the sp500 today at 3270 should turn into 50,000 by 2060 and 100,000 with dividends reinvested. 

https://imgur.com/a/qXQm1W9

Stonks go up.  

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