2009 is history, and of course the financial media is writing a lot about the “lost decade” of investing. That may be the case for blue chip stocks of the S&P 500 index, which generated a ten-year negative annualized return of -1.03 percent.
For investors who embraced a diversified portfolio beyond domestic blue chip stocks, long advocated at the Coffeehouse (first suggested in 1999), the decade was anything but “lost.”
Below are the numbers that show the returns over various time periods, with the 10-year annualized number coming in at 5.74%.
Investors who completely ignored the daily ups and downs of the market, completely ignored the empty daily chatter of Wall Street, and instead embraced this simple portfolio and got on with their lives, came out ahead once again.
Is it time for you to finally embrace the Coffeehouse investment philosophy in your life and in your portfolio?
Don’t let the next decade be another “lost decade” of investing.
Remember, when it comes to investing, “time” is the most precious asset class of all.
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ANNUALIZED |
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RETURN |
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1991 |
23.55% |
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1992 |
9.57% |
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1993 |
15.65% |
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1994 |
-0.58% |
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1995 |
22.90% |
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1996 |
14.53% |
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1997 |
17.95% |
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1998 |
6.89% |
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1999 |
8.30% |
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2000 |
7.25% |
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2001 |
1.88% |
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2002 |
-5.56% |
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2003 |
23.54% |
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2004 |
13.80% |
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2005 |
6.24% |
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2006 |
15.15% |
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2007 |
2.63% |
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2008 |
-20.21% |
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2009 |
20.26% |
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19 YEARS |
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9.10% |
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10 YEARS |
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5.74% |
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5 YEARS |
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3.79% |
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2 YEARS |
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-2.04% |
I want to wish you a Merry Christmas, and hope that you and your families have a fun and relaxing holiday season, and all the best to you in the New Year.
I am always drawn to folks who take the time to share their gifts, no matter how great or small, with the world around us.
On Monday, I rushed in to the local post office to mail some last minute Christmas cards. Much to my surprise and delight, a postman was standing off to the side, playing some Holiday tunes on his Kamaka Ukulele. It was a wonderful experience to enjoy his incredible talent, while waiting in line and getting ready to celebrate the winter solstice that evening.
Mr. Postman, thank you for touching the lives and bringing cheer to all of us – and Merry Christmas to you.
I have always admired folks who can take a rational look at, and clearly articulate, an opposite viewpoint, while still embracing their own beliefs.
Charles Kirk is the creator of “The Kirk Report” one of the nation’s most popular financial web-sites aimed at providing stock market analysis and individual stock recommendations to individual investors.
He has been successful by diligently following the stock market and makes a living through the frequent buying and selling of individual stocks.
Investors who embrace The Coffeehouse Investor approach to building wealth know that our philosophy is very much the opposite – the best way to maximize long-term returns in common stocks is to buy and hold a globally diversified portfolio of low-cost index funds.
However, I am well-aware that many investors who embrace the Coffeehouse philosophy with the majority of their portfolios at the same time enjoy the challenge of trying to beat the stock market by purchasing individual common stocks. In fact in my book I wrote one chapter addressing this issue, titled, “Let’s Have Some Fun.” I encourage those investors who do want to trade stocks to allocate a maximum of 5 to 10 percent of their portfolios to active stock selection.
In the book, I write, “And who knows? Somewhere among the millions and millions of stock pickers you might be the next Warren Buffett. But I am not sure it is worth risking your entire portfolio to find out you aren’t.”
Charles Kirk recognizes that following the stock market and actively buying and selling stocks is not for most investors. As such, he is also a big proponent of the same investment philosophy embraced by Coffeehouse Investors. Recently he interviewed me and my thoughts on investing, and graciously allowed me to re-print the interview on my web-site.
A big thank-you Charles, for allowing me to highlight the Coffeehouse message to all your faithful followers . . .