There are few guarantees when it comes to investing, but investing for the long term in quality companies is pretty close to it.
Since 1928, over rolling 10-year periods, there have been only 7 instances when the market was not higher. Those were the periods ending in 1937, 1938, 1939, 1940, 1946, 2008 and 2009. This equals a 93% chance of success!
This is the return on a one-time investment. If you continue to invest over the course of 10 years, you’ll do even better. If you invest longer than 10 years you do substantially better, too.
To improve these results even more, buy Perpetual Dividend Raisers (PDR). PDRs raise their dividends every year. The S&P 500 Dividend Aristocrats Index is an index of companies in the S&P 500 that have raised their dividends for 25 years in a row or more. The index was created in 1990. Since then, over rolling 10-year periods beginning with the 10 years ending in 1999, the index has never lost money. The worst 10-year performance including dividends was a 40% return, ending during the heart of the financial collapse in 2008. Even without dividends, just measured on pure price movement, the index still gained 9%. It shows you the power of these stocks. If you had bought them in 1999 at the top of the dot-com bubble and sold just before the bottom of the mortgage meltdown, these PDRs would still have been in positive territory!
Since the index began, the average 10-year return with dividends is 196%, nearly tripling your money. The total return is 3,272%.
Sven Franssen