We’ll start this off with a disclaimer: past history is not a guarantee of future results, and it should neither be assumed that future results will be as profitable or that a loss could not be incurred. Now, let’s take a deep breath and acknowledge that the markets have shown sufficient resilience recently to talk about the present—and recent past—in positive terms.
Long-term Investing and Patience
So, in the high-speed, hyperconnected world we live in, the virtue of patience can sometimes seem almost antiquated. When it comes to investing, however, patience can yield substantial rewards. Long-term investing is a strategy that has proven its merit time and time again, reinforcing the adage: good things come to those who wait. (Not always, of course. See also the disclaimer above, if you happened to have missed that.)
Take the S&P 500, for instance. It’s an index often used as a barometer for the overall U.S. stock market and a benchmark for many investment funds. Let’s walk through the recent performance of the S&P 500 to illustrate the power of patience in investing.
On June 15, 2023, the S&P 500 closed at 4,425.841 Let’s rewind five days to June 9, 2023. The index closed at 4,298.86. That’s a gain of approximately 2.95% in just five days.
Now, let’s look a month back. On May 15, 2023, the index closed at 4,136.28. Compared to the closing figure on June 15, that’s an impressive increase of around 7.01% in one single month.
Year to Date
The gains become even more substantial as we widen our time horizon. The S&P 500 began the year 2023 at 3,824.14 and reached a high of 4,372.59 , a significant gain of 14.33% year-to-date.
Five Years and Beyond
But what about a five-year span? In 2018, the S&P 500 was hovering around the 2,700 mark. Fast forward to 2023, the index has leaped well over 60%, again demonstrating the power of long-term investing.
Finally, let’s take a step back and look at the all-time gains. In 1928, the S&P 500 stood at 24.35. From way back then until today, the index has grown by a staggering 18,000+%!
The gains of the S&P 500 over these periods illustrate the potential rewards of patient, long-term investing. For individual investors, this means investing in solid companies with effective and often visionary leadership. In other words, it’s not about timing the market but rather time in the market that often reaps the greatest rewards.
Note: Adjusted close price adjusted for splits and dividend and/or capital gain distributions.
Disclosure: This information is for educational and informative purposes and shall not be considered a specific recommendation. Readers are advised to speak with their advisor at JL Bainbridge to determine their specific recommendations that meet their investment objectives and to review their portfolios. The material being provided is thought to be accurate. However, the information is compiled from multiple resources and may become outdated or otherwise rendered incorrect by new research or corrections without notice. J.L. Bainbridge & Co., Inc., is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. It should neither be assumed that future results will be as profitable or that a loss could not be incurred. For more information related to our firm, please see our disclosure brochures at jlbainbridge.com and https://adviserinfo.sec.gov/firm/summary/108058.