Now is the Time to Invest

by | Nov 2, 2022 | General

Being greedy when others are fearful

Our timing might not be ideal, but we do believe that the fall of 2022 will turn out to have been a very good time to put cash into the stock market. Recommending stocks at a time like this is hardly revolutionary. In October of 2008 Warren Buffett wrote a New York Times op-ed entitled, “Buy American, I Am.”

The money quote:

“I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.”

Buffett’s short-term timing was “terrible”—the market fell another 26% by March of 2009. But below are the returns for stock investors who bought in October of 2008 when Buffett was writing, compared to those lucky few who caught the market low the following March.

  S&P 500 Gains Including Dividends
October 16, 2008  to  October 2022 438%
March 9, 2009  to  October 2022 642%

Obviously catching the ultimate low in March of 2009 would have yielded more than taking Buffett’s advice in October, but both dates proved to offer a great opportunity. Sitting on your hands in late 2008 was an epic mistake.

So anyone with cash today should start putting it to work. And buying stocks isn’t like buying a house—you don’t have to do it all at one time. Adding cash to a stock portfolio each month is a time tested way to end up with a very attractive average price paid.

But what if you’re already invested? We learned a long time ago that when calculating future returns, there is no difference between buying a stock today or waking up this morning with the same stock already in your portfolio. Buy a great company today or keep a great company today— there is no difference and you’ll be happy with the result when looking back.

Best regards,

Daniel A. Ogden

Dock Street Asset Management, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. You should not assume that any discussion or information contained in this letter serves as the receipt of, or as a substitute for, personalized investment advice from Dock Street Asset Management, Inc.

It is published solely for informational purposes and is not to be construed as a solicitation nor does it constitute advice, investment or otherwise.

To the extent that a reader has questions regarding the applicability of any specific issue discussed above to their individual situation, they are encouraged to consult with the professional advisor of their choosing.

A copy of our Form ADV Part II regarding our advisory services and fees is available upon request.

Our comments are an expression of opinion. While we believe our statements to be true, they always depend on the reliability of our own credible sources. Past performance is no guarantee of future returns.