Every day for 20 years, this lady prayed to win the
lottery. Every single day. Finally, in despair, she said,
"God, I've been a true and faithful servant, and I have lived
an exemplary life. Why won't you grant me this one
thing?"
"Look," said God, "at least meet me halfway -- and
buy a lottery ticket."
Buy the ticket
Similarly, to take advantage of the greatest long-term
wealth-building machine available to us individual investors,
you
haveto be in the market. And if the current
craziness is keeping you away because you fear a huge drop,
you're ignoring the advice of some of history's top
investors.
In the latest edition of his book
Stocks for the Long Run, Jeremy Siegel charted
returns for a hypothetical unlucky investor who happened to
invest at the absolute top of six major 20th-century market
peaks. After 30 years, this investor actually accumulated
four times more wealth in stocks than he would have in bonds,
and five times more than in T-bills. For a 20-year period, he
doubled the bonds return.
There's more where that came from
Consider John Templeton, who sadly passed away last
year. The founder of Templeton Growth Fund and a man widely
regarded as one of the best investors of his generation,
Templeton had some simple advice about getting into the
market: "The best time to invest is when you have money. This
is because history suggests it is not
timingwhich matters; it is time."
Our own David and Tom Gardner, who've beaten the market by
a tremendous amount in
Motley Fool Stock Advisor, also eschew any attempts
at timing the market. "The best time to invest was
yesterday," says Tom. "The next best time is today."
So even though the tongue-in-cheek title of this article
implies that you've missed your
bestchance, you can see that you really haven't. If
you have money you won't need for five years or more, just
get in the game as soon as you can.
Still need convincing? I looked back 10 years,
specifically searching for companies that had been up 25% or
more in one year. Surely many investors back then were
worried that stocks were too rich and ready for a great fall.
Well, a gnarly bear market did start up a couple of years
later, and yes, these stocks fell. Yet despite their
tremendous prior one-year gains, and despite
twogreat bear markets, their returns were gratifying
for those who held for the long term -- especially
considering that the market lost a quarter of its value in
the meantime.
Company
Sept. 1998 to Sept. 1999
Sept. 1999 to Sept. 2009
Green Mountain Coffee
Roasters (Nasdaq: GMCR)
49%
6,817%
Goldcorp (NYSE: GG)
28%
1,627%
Boyd Gaming (NYSE: BYD)
27%
77%
Celgene (Nasdaq: CELG)
191%
2,487%
InterDigital (Nasdaq: IDCC)
67% Continued... |