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“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 E. BUFFET

Posted by Michael T Boyle on Fri, 02/15/2019 - 16:22

Given the 30-year historical milestone of the Warren Buffett quote and facts below, I couldn’t help but share…

“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 E. Buffett, the world’s most admired, least imitated investor, in his annual letter to shareholders 30 years ago this month, dated February 28, 1989

_Note:

_{• On February 28, 1989, the Standard & Poor’s 500-Stock Index closed at 288.26. On December 31, 2018 it closed at 2,507, fairly close to nine times more valuable than on the day of Buffett’s letter. Of course, this ignores dividends.}

_{• The cash dividend of the S&P 500 for the full year 1989 was $11.73. For the full year 2018, it was $53.61, a bit more than four and a half times where it was in 1989.} 

_{• To get a sense of how these increases compare to inflation, 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.}

_{So, for retirement income purposes, the S&P500 has effectively paid out a dividend stream that has grown at over twice the rate of inflation…who doesn’t love an income raise?}

_{Investing should never be “timing the market.” It is always about TIME IN THE MARKET.}

_{The S&P 500 Index is a broad-based measurement of changes in stock market conditions based on the average performance of 500 widely held common stocks. All indices are unmanaged and investors cannot invest directly into an index.}