When I was a kid, everyone watched the same thing. We’d gather around one TV or, for some of my older readers, one radio, and share the moment. Now everyone stares at their own screen. No one knows what anyone else has seen. We’ve lost the bonding, the conversation.
I’ll admit, I don’t miss romantic comedies, but I do miss togetherness. Back then, the goal was to do things without the TV. Now I’m just trying to get everyone watching the same TV. Society doesn't seem to be trending in the right direction.
We moved into our new house six months ago. It’s not old, but it’s acting like it. Yesterday alone, I had an electrician for the breaker box, two plumbers who couldn’t fix the water heater, a gate guy because the dogs keep escaping, and a pool guy because the water’s turning green.
Home ownership isn’t as romantic as it sounds. As I’ve written before, after repairs, insurance, and taxes, most people don’t make money on their homes long term.
Anyway, you might spot a quiet predator among my orchids below.
Over the past few years, many investors have experienced something that feels pretty great: strong, steady, double-digit returns. For many people, opening their account statements lately has been a satisfying experience. And while it has been rewarding to watch portfolios grow, it’s also created a subtle risk, something I want to address before it quietly sneaks up on us.
The risk isn’t that the market is "too high" or "due for a crash." I am not predicting one, and I’m not suggesting we panic or change strategy. In fact, if history teaches us anything, it is that strong markets can continue for a long time. From 1995 to 1999, the S&P 500 averaged more than 28 percent per year for five straight years. In the 1980s, we saw a similar stretch of exceptional returns. Even in the 1950s, there was a five-year period when the market averaged over 19 percent annually. So no, what we’re experiencing today isn’t unheard of—and it may very well continue.
But it is important to remember that it isn’t normal. Over long stretches of time—decade after decade—the stock market has averaged about 8 to 10 percent per year. In other words, we are currently above the long-term trend. That doesn’t mean we’re in danger. It simply means expectations need to stay grounded.
It’s easy, after a few great years in a row, for people to quietly assume the market should return 12, 15, or even 20 percent year after year. That kind of mindset leads to trouble. It causes people to take more risk than they should. It leads to frustration the moment we hit a normal year.
I want to be clear: I am not calling for a market pullback. I’m not sounding an alarm or hinting that "it’s time to get defensive." This is not that message. This is simply a reminder that long-term investing works because it is long-term. There will be great years, normal years, and below-average years, but none of that changes our strategy. We didn’t invest based on a forecast, and we won’t change course based on a feeling. Our approach is consistent because that’s what works.
So while we enjoy this strong market environment, let’s also stay anchored. Let’s keep our expectations realistic and our discipline intact. As always, my priority is not to react to the news of the day, but to help you reach your long-term goals, steadily and without emotional decision-making. In every market climate, wisdom beats excitement.
Be Blessed,
Dave