Regardless of the type of market we’re currently in, long-term investors should continue seeking stocks of high-quality growth companies, which are trading at historically attractive valuations.
A Special Message from Dennis Genord
Sir John Templeton, a respected investment counsellor and portfolio manager, once stated, “The stock market always has been, and always will be, subject to wide degrees of fluctuations. When prices decline farther and farther, it is only natural human emotion to become cautious. Investors who have no pre-arranged plan to guide them not only fail to add to their stock holdings at the lower levels but too frequently they add to the downward pressure by selling out part or all the stocks they own.
Profitable investing is mainly common sense. Don’t get carried away by enthusiasm. Don’t get carried away by despondency. Don’t buy things you don’t understand. Always study what you buy in advance. Make long-range plans. Know in advance that you are going to have to live through bear markets. Just use plain common sense and the chances are that you’ll have superior long-term investment performance.”
Many of these truths are heard regularly at our online events, the BetterInvesting National Convention, and in our chapter classes. What we’re going through is not unlike other periods of financial history. BetterInvesting members have understood this since the time of its inception in 1951. We have a plan and it is rooted in the common sense principles provided by the organization’s founders. These principles include:
- Invest a set amount of money regularly.
- Reinvest all earnings.
- Buy stock in high-quality growth companies.
- Diversify your portfolio.
We spend most of our energy implementing the third principle: looking for high-quality companies, and determining a fair price to pay for the company's stock. We do this using the Stock Selection Guide (SSG).
Regardless of the type of market we’re currently in, long-term investors should continue seeking stocks of high-quality growth companies, which are trading at historically attractive valuations. The recent severe drops we have experienced in the market can result in just that - attractive valuations.
We cannot draw any fixed conclusions about the effects of pandemics, wars, economic activites, rising interest rates, threats of recession, etc. upon stock-market performance, but I am confident we will get through them, and the long term investor will be rewarded for staying the course. Innovation, technology and indomitable human spirit will win in the end.
If you would like to speak with someone experienced in these types of market conditions, please reach out to your local chapter volunteers. You can find their contact information on the BetterInvesting website at www.betterinvesting.org
. They would love to help you.
We wish you calm and clarity in these turbulent yet opportune times.
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Written by: Dennis Genord, Director, Education and Chapter Relations, BetterInvesting
Dennis Genord has been a BetterInvesting member for over 30 years as well as a partner in three investment clubs. Dennis has managed the development of BetterInvesting’s mutual fund tools and education, and the development and implementation of BetterInvesting’s online stock selection tools. He also leads organizational efforts to develop and deliver in-person and online investment education to BetterInvesting members and investment clubs. He helped develop the Building Wealth Curriculum that focuses on financial literacy , and supports teachers using the curriculum in high schools across the nation. Dennis represents BetterInvesting at local, regional, and national investment education events and is an advocate for the organization’s long-term, fundamental approach to stock and mutual fund investing.