Looking Back to Look Ahead

Random Words from our sponsor, Public.com

Listen up folks. Time could be running out to lock in a historic yield at Public.com. You can lock in a 6% or higher yield with a bond account. Here's the thing. The federal reserve just announced a big rate cut, and the plan is for more rate cuts this year and in 2025 as well. That's good news if you're looking to buy a home, but it might not be so good for the interest you earn on your cash.

So, if you want to lock in a 6% or higher yield with a diversified portfolio of high yield and investment grade bonds, you might want to act fast. The good news: It only takes a couple of minutes to sign up at Public.com. And once you lock in your yield, you can earn regular interest payments, even as rates decline. Lock in a 6% or higher yield with a bond account at Public.com/InvestingUnscripted, but hurry. Your yield is not locked in until you invest.

Brought to you by Public Investing. Member FINRA and SIPC. As of 9/6/24. The average annualized yield to worst across the bond account is greater than 6%. Yield to worst is not guaranteed. Not investment recommendation. All investing involves risk. Visit Public.com/disclosures/bond-account for more info.

Jason’s Random Words

As the year starts to come to a close, I’ll be spending most of the next week and a half with friends and family, and very little working or thinking about investing. So these words will serve as a summary of my observations, and judgement on my own performance as an investor over the past couple of years. Before I indulge in any self-congratulations or flagellation, let’s look back at the market.

There aren’t many of us who expected 2024 would come anywhere close to being as good a year as the prior. Yet here we are: Through Dec. 20, the S&P 500 is up just over 26% in total returns, almost exactly the same as we saw in 2023. The 2-year total returns for the S&P 500 are more than 59%. There are a lot of people out there who have a lot more wealth today than they did at the end of 2022.

It’s been a really good run

According to this handy calculator, the S&P 500 has averaged 9.7% in compounded annualized total returns since the beginning of 1929. At that average rate of return, it would normally take five years to grow your portfolio by 59%. In other words, we’ve had a pretty great half-decade in the past two years.

But it’s not just the past couple of years that’s been exceptional.

Since the beginning of 2020, the market is up almost 99%. We have navigated both the two worst market downturns since the Financial Crisis — it took almost two years for stocks to fully recover from the 2022 bear market — and a once-in-a-century global pandemic, yet the stock market has earned a CAGR of 14.8%, roughly 50% better than the long-term average.

Simply amazing.

Time for a little self-accountability

Over the long term, I have generally outperformed the market, particularly in the accounts where I take on more risk (like the Roth IRAs I manage for myself and my wife) but since 2022, my returns have not been close to the market’s. Over the past three years, I have earned a combined CAGR of 2.11%; like many of you, my portfolio was hit very hard in 2022, and most of the great results of the past two years have just gone to digging me out of a hole, though I’ve earned nearly market-returns in those two years, even with the increasing weight of cash and bonds in the mix.

Revisionist history warning! I have fully shifted my focus away from trying to beat the market writ large, and am focused on reaching my financial goals. That’s not to say that I don’t expect to beat the market with the stocks that I own; it wouldn’t make much sense to keep picking stocks if I didn’t expect to outperform the market with my stock picks.

This is more about asset allocation than expectations for the stocks I own. Without being too specific, I now have more than 20% of my portfolio in a mix of cash and bonds. I can see some of my financial finish lines with binoculars now, instead of needing the Hubble telescope. So my investment mix is shifting accordingly.

I’m sure if we do see a big downturn next year I’ll feel like a genius. I’ll try to not let it go to my head. Either way, I’ll continue holding and investing in new ideas, and occasionally selling losers and maybe more trimming of winners to rebalance as needed.

Back to basics, and remembering what really matters

If there’s any one thing that I learned and took to hear from Charlie Munger, it’s that most of investing success is the result of:

• A very few, very good (lucky) investing decisions

• A very lot of doing absolutely nothing else

At the last annual meeting he attended, Charlie said, “just hold the goddamn stock” and he was absolutely right. My biggest mistakes continue to be selling some of my biggest winners too soon, and trading around my portfolio too often. Winning stocks are exceedingly rare. Buying one is even rarer. Holding is the rarest of all.

Now, that doesn’t mean holding forever. As much as we love the idea, for the non-billionaires of us, it’s just not realistic. Investments are just another financial tool. Don’t fall too in love with any of them, lest you find yourself visited by three ghosts one lonely Christmas Eve…

Gaining and retaining wealth should serve one purpose — that of meeting the needs of you and those you care about. If you keep that — and those who matter most — at the forefront of your mind, heart, and financial planning, you may find the decision making gets easier and less emotional.

You can do it,

Jason

The $100 Trillion AI Opportunity You Can’t Afford to Miss

Artificial Intelligence isn’t just the future—it’s a revolution that’s already reshaping industries and creating unprecedented wealth for early investors.

Renowned entrepreneur and former hedge fund manager, James Altucher, predicts AI will be the biggest wealth-building opportunity of the decade. In fact, he believes AI will create the first $100 trillion industry, surpassing even the tech giants of today.

Altucher has made bold predictions before, and he’s been right. Now, he’s saying that an investment of just $10,000 in the right AI stocks could skyrocket into $1 million over the next few years—but only if you act fast.

The window of opportunity is closing quickly. According to Altucher, the “wealth window” for AI investments will slam shut this month. Miss this chance, and you could miss out on the greatest tech revolution of our time.

In this short, eye-opening video, Altucher lays out the exact AI companies poised for massive growth and explains how everyday investors can tap into this opportunity before it’s too late.

Plus, to help you get started, Altucher is revealing one of his top AI stock picks for free. Don’t wait—this could be your last chance to get in before the next wave of AI millionaires is made.

Watch the AI Profit Blueprint Video Now