Getting Rich Slowly

Jeff’s Random Words

I read an interesting post this week on Ben Carlson’s A Wealth of Common Sense website about how bull markets work. The essential point is that a bunch of small gains can add up to a big year in the stock market. Here’s a short snippet from the post where he describes the current bull market in 2024:

There have been just 14 trading days with gains of 1% or more. There has been just a single 2% up day in 2024. And there have only been 7 days of down 1% or worse.

Ben goes on to contrast this with 2022, where large daily gains and drops were more common during the bear market. We feel the daily movement more in the downturns than the bull market rallies. Certainly, there are exceptions (the last few months of 2023 come to mind) but the general point he’s making is that bull markets can sometimes be boring for long periods of time.

This got me thinking about how this relates to how we invest as retail investors. I like to say that nobody wants to get rich slowly, but that’s exactly how it’s supposed to happen. Invest as much as you can as regularly as you can for as long as you can and slowly, sometimes imperceptibly over time, it turns into a lot of wealth. 

I was talking to a friend recently who wanted a “set it and forget it” investment for an old retirement account he was rolling over into an IRA. I shared some things to look into and said something along the lines of “Set up a recurring investment into an index fund and don’t look at it again until you retire”. This was not investment advice, but rather a way for someone who wants an easy option to “get rich slowly”. 

I get the appeal of looking at Nvidia (NVDA) in your portfolio and feeling like a genius. I love investing in individual stocks. But people who enjoy it to the degree I do are likely in the minority. For most investors, Ben Carlson’s point about how boring bull markets can be is a great metaphor for how investing for retirement should be for most people. Slow, boring, tiny gains over decades. 

Jeff

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