Before there was an internet, 24/7 financial news coverage, or personal computers that allowed you to day trade like a big shot, there was Wall Street Week with Louis Rukeyser. It was must-see TV.
Wall Street Week with Louis Rukeyser debuted in 1971 and ran uninterrupted for the next 34 years. It was a weekly educational talk show that provided viewers with information on finances and the economy along with ongoing discussions with various financial gurus and market experts. It was a first, a one-of-a-kind.
When I discovered Wall Street Week in the early 1980’s, I quickly became a fan. I was just beginning to get serious about investing. Wall Street Week brought weekly entertainment and (so I thought at the time) financial education. I thought it was great.
Then a funny thing happened. Some forty years flew by, and now with the benefit of time, experience, and a more expanded view of what really matters, I now realize that while Wall Street Week with Louis Rukeyser was entertaining, it was in no way really helpful as far as teaching or instilling fundamental investment truths and principles. Questions and answers generally centered around what might happen in the financial markets over the next few ensuing days or weeks. Days or weeks. Other than providing simple entertainment, could anything be more useless?
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Just for the fun of it, not so long ago, I revisited a number of vintage Wall Street Week programs (available on the American Archive of Public Broadcasting website). After taking this sentimental journey through the market news of the last fifty years, it hit me like a ton of bricks – the more things change, the more they stay the same.
Week in, week out, the financial concerns of the last fifty years all seemed so familiar. If it wasn’t “poor earnings visibility,” it was “rising interest rates.” Or inflation. Or politics. Or recession fears. Or a falling dollar. Or the rising Federal debt. Or the deficit. Or geopolitics. Over and over and over again.
If this list sounds familiar, it ought to. Any one of these concerns is still here with us, and eliciting furrowed brows by those in the know today.
Should any of this even matter to true investors?
Apparently not. All of those stresses fade into meaningless background noise when measured and considered against what has actually happened in the financial markets over the last fifty years.
An investor whose portfolio returns would have mirrored the S&P 500 stock index over the last fifty years would have compounded money at 10.42% per year, growing every dollar invested to approximately $157 (or every $100,000 to approximately $15,708,336)[1]. Take that, bad news!
It turns out that all of the bad news of the last fifty years has amounted to diddley squat in so far as how it ultimately affected the markets over the long term. That is exactly why for true investors, we have counseled, ignore everything. And we aren’t just being flippant, we mean it.
Sure, there have been market declines. But recoveries have always ensued. What matters is to not let yourself get psyched out during temporary periods of duress. Real world stresses come and go. Markets adjust and eventually move higher. Do not sell America short.
It’s a fool’s errand to overweight or react to near term concerns, as the long-term financial record for the markets could not be more clear. That’s just the way the world has worked.
There have always been and always will be recurring bouts of trouble, but if you can steel yourself to follow your plan (yes, that’s where that investor behavior thing comes in), you will likely be pleased with the results. And if you know someone who has accumulated meaningful wealth, but may not have dedicated themselves to a meaningful long-term plan, we would love to have a conversation with them and see if we can help them to also settle on an allocation they can live (and sleep) with. It’s important.