Video blog – two short messages about long-term investing
This blogpost is short – two short videos about investing from thought leaders I respect. I am sharing them to provide some long-term thinking in the midst of so much short-term news. Understandably, almost all of the news and information we are consuming is about the now, or the near-term.
- How fast is COVID-19 spreading, or could it spread without social distancing?
- When might the economy and businesses open back up?
- Will Doc or Jeff follow Joe Exotic’s trajectory from cage-owner to cage-dweller?
I am also digesting news about such matters, but I am also consciously looking for sources to remind myself about the power of long-term thinking (in particular regarding investing). The following two short video messages are two messages that I’ve found compelling.
The first is an animated graphic showing how missing just a few of the biggest gain days would have led to inferior long-term results. A short-term strategy of trying to time the market runs the very real risk of missing out on the best performance days. The second video is a message from David Booth, the CEO of Dimensional Fund Advisors, the company that manages the investment funds I personally own, and recommend for many of my clients.
Video 1. The effect of market-timing on long-term investment performance
Video 2. David Booth (CEO and Founder of Dimensional Fund Advisors) speaks on Uncertainty and the Coronavirus
Note  – Investing in stock and bond markets carries the inherent risk of losing money. Past performance should not be used to predict future performance. An individual should generally not invest in stock and bond markets until various short-term financial building blocks are well laid. Those include paying off high-interest debt (like credit cards) and holding a decent emergency fund.