Projections are Just Guesses… even the educated ones
In late 2022 the Bear market of that year ran out of gas. The S&P 500 had fallen over 20% and Dock Street stock portfolios had lost more. Investors were gloomy and convinced that a recession would begin in 2023.
Of course, the recession didn’t happen and since then the S&P is up over 50% (see below) and Dock Street stock portfolios are up significantly more than the index. The last three years present another example of why focusing on economic projections and then attempting to time the market is a mistake.
We gave up on tracking and guessing about the trend of the stock market years ago. We know the long-term trend of stocks is up and continues to offer 11% to 12% returns on average. That’s a nice tailwind.
When stocks fell in 2022 we sold some small mistake positions purchased in 2021, but we didn’t touch the large core positions in our portfolios with large gains. Clients should expect similar behavior the next time the market takes a dive.
We strive to only invest in companies with powerful competitive advantages and extraordinary financial strength. When the next bear market arrives these stocks will fall with the rest of the market, but they will survive and their stocks will be repurchased when investors calm down.
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.
