Investment Newsletter for the end of September, 2022

September stunk big time. And, it has gone up 1500 points by October 4th.

The market recently has declined this year quite a bit, which at a casual glance is very scary. However, we argue that it isn’t truly scary but a golden opportunity.

The market has fallen many times in the past, but it has always recovered eventually. The only way the market doesn’t recover is if the United States ceases to exist as a country, which is extraordinarily unlikely. Knowing that the market will very likely eventually recover, we can take advantage of the depressed prices as a way of scooping up some bargains.

One of the biggest stock market crashes in recent history was in 2007. From the beginning of the decline to the bottom, the US stock market fell 50%. From the bottom of that pit to now the US stock market has increased 5-fold. If you had bought stock during the pit, you would have made a very fine return on your investment. At the time of purchase, many would have called you an idiot, but history would have vindicated you. Of course, no one knows when the market is going to turn. Just because the market is lousy doesn’t mean that next month it won’t become even worse. Next year might be even worse than that. However, eventually the market will likely recover. People who had the stomach and fortitude to buy when the world is collapsing will likely profit when the better future comes. As macabre as the expression is, there is some truth to the expression “Buy when there’s blood in the streets”.

A critical part of our investment management practice is taking advantage of the market dips. When the stock market falls, we buy more stock. We increase the portfolio’s exposure to the wild market. To many that would seem risky, but we don’t think it is. In the short term there’s some risk, but in the long-term things are almost certainly going to be smooth and bright.

If you have any questions about your investments, please call at any time. We sincerely hope you got value from this newsletter.

We appreciate your business and trust.

Dan and Eli

As we’re writing these to help our readers, we would be very appreciative of any input in regards to what we should write next. If you want us to write about a particular topic, please contact me. Please contact me if you would like to submit a post to our blog.

If anything that we mentioned above interests you, please consider downloading our free e-book. The book contains our thoughts on investment management and some information that we think everyone should know. You can also download it below.

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