Jonathan discusses investing in the Markets vs. Cash – maintaining a long term investment perspective. Metrics on business / stock ownership vs. cash.
Good afternoon. This is Jonathan Satovsky of Satovsky Asset Management. November 21st 2018 with a video blog update.
And why don’t I wish everyone a Happy Thanksgiving.
Pre-Thanksgiving to give gratitude and thanks for the wonderful things in our lives, friends, family, good health and good meal. And hopefully a Detroit Lions victory on Thanksgiving.
So this is particularly important on this Thanksgiving because the last month and a half in the financial markets and business cycle have been very negative with a lot of headlines that have been promulgating a lot of negativity.
And trying to convince people that the future is going to be bleaker than the past.
And the nature of businesses just to put it in perspective if you’re measuring owning businesses versus having money in cash.
Cash is going to outperform or let’s say cash versus stocks.
Stocks will outperform cash 51% but if you’re measuring by a day.
If you’re measuring by a year, 66% of the time, 66% of the time businesses will outperform holding cash.
Over 10 years 90% of the time owning businesses will outperform cash.
So the measuring stick and the time frame and the perspective and expectations is very important.
Setbacks do happen but over time one thing is been a very high probability is that inflation in the cost of living does go up.
And over a lifetime and multiple generations of lifetimes having an ownership stake in businesses which is owning the market or investing in stocks is a perspective that people should continue to maintain even though it’s not always glorious.
So there’s a degree of resilience that’s needed and it’s not someone’s intelligence to be able to maneuver to know I should be all in and all out this week or this month.
But it’s a matter of temperament and a matter of perspective of are you planning for the next week, the next year, the next 10 years or a lifetime.
And that should help frame the appropriate structure for your planning and investing over a lifetime.
With that have a happy Thanksgiving.
Jonathan M. Satovsky, CFP, ChFC, CIMA, CPWA
Satovsky Asset Management, LLC (SAM)
232 Madison Avenue, Suite 400
New York, NY 10016