An Elemental Financial Literacy Lesson

Are you still reading books on economic cycles, trading and hedging strategies to boost your financial literacy?
Is the most powerful and important investment book among them?

It is called โ€˜Shut Up and Wait.โ€™*

It’s just one page with a long-term chart of economic growth.


Global GDP Growth - 70 years


Why?

The historical odds of making money in U.S. markets are 52/48 over one-day periods, 68% in one-year periods, 88% in 10-year periods & (so far) 100% in 20-year periods.

๐—”๐—ป๐˜†๐˜๐—ต๐—ถ๐—ป๐—ด ๐˜๐—ต๐—ฎ๐˜ ๐—ธ๐—ฒ๐—ฒ๐—ฝ๐˜€ ๐˜†๐—ผ๐˜‚ ๐—ถ๐—ป ๐˜๐—ต๐—ฒ ๐—ด๐—ฎ๐—บ๐—ฒ ๐—ต๐—ฎ๐˜€ ๐—ฎ ๐—พ๐˜‚๐—ฎ๐—ป๐˜๐—ถ๐—ณ๐—ถ๐—ฎ๐—ฏ๐—น๐—ฒ ๐—ฎ๐—ฑ๐˜ƒ๐—ฎ๐—ป๐˜๐—ฎ๐—ด๐—ฒ.

This means that there has never yet been a 20-year period where the stock market has lost money! (The Japanese Stock Market might be the one to really make this a rule … no rule without exception, right?)

If youโ€™re invested primarily in index funds, which track the performance of the global market as a whole, youโ€™re almost ๐—ด๐˜‚๐—ฎ๐—ฟ๐—ฎ๐—ป๐˜๐—ฒ๐—ฒ๐—ฑ ๐˜๐—ผ ๐—บ๐—ฎ๐—ธ๐—ฒ ๐—บ๐—ผ๐—ป๐—ฒ๐˜† ๐—ถ๐—ณ ๐˜†๐—ผ๐˜‚ ๐—ท๐˜‚๐˜€๐˜ ๐˜„๐—ฎ๐—ถ๐˜ ๐—น๐—ผ๐—ป๐—ด ๐—ฒ๐—ป๐—ผ๐˜‚๐—ด๐—ต.

And if your time horizon is 10+ years, the daily market news is totally irrelevant to you. You are better off ignoring those.

Got 3 questions for you:

Might the most overlooked and underappreciated growth strategy right now be patience?

Could it be that patience is a virtue no one has time for anymore?

Might patience be that rare type of power YOU have total control over?


But โ€“ สŸแด‡แด› แดแด‡ แด›สœส€แดแดก ษชษด แด€ โ€˜แด„แดษดแด›ส€แด€แด…ษชแด„แด›ษชแดษด แด€สŸแด‡ส€แด›โ€™ สœแด‡ส€แด‡ – history is NOT a map of the future!

๐™๐™๐™ž๐™ฃ๐™œ๐™จ ๐™ฉ๐™๐™–๐™ฉ ๐™๐™–๐™ซ๐™š ๐™ฃ๐™š๐™ซ๐™š๐™ง ๐™๐™–๐™ฅ๐™ฅ๐™š๐™ฃ๐™š๐™™ ๐™—๐™š๐™›๐™ค๐™ง๐™š ๐™๐™–๐™ฅ๐™ฅ๐™š๐™ฃ ๐™–๐™ก๐™ก ๐™ฉ๐™๐™š ๐™ฉ๐™ž๐™ข๐™š. ๐Ÿ˜‰

Patience is not passive, on the contrary, it is concentrated strength.โ€ -Bruce Lee

*borrowed from Morgan Housel

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