As of this writing, the S&P 500 broad market index is up around 8.5% since the beginning of the year, but just 20 stocks — concentrated in tech — have accounted for 90% of those gains. Did you pick the winning stocks, and will you know when to get out?Trading stocks involves multiple decisions: when to get in, when to get out, and then when to get back in again! You have three times as many chances to be wrong, compared to the long-term investor.
Yet Buffett isn’t averse to keeping cash on the sidelines, waiting for better investment opportunities. As of year-end 2022, his cash hoard had grown to $128.651 billion — up from nearly $109 billion in the third quarter. Buffett’s Berkshire Hathaway stock has created great wealth for investors over the long run. His investment philosophy of seeking strong companies with unique businesses and good management has been a winning philosophy in good markets and bad.Buffett makes successful investing look easy. But he is the exception that proves the rule!
S&P/Dow Jones Indices has just released its year-end performance report for 2022. And to no one’s surprise, the new report shows that as in previous years, winning fund managers fail to repeat their outperformance of the markets in subsequent years. In fact, 51% of large-cap U.S. equity funds lagged the S&P 500® in 2022.
And time only makes the statistics worse! Only 5% of the above-median large-cap active equity funds in calendar year 2020 remained above median in each of the two succeeding years. By submitting your email to receive this newsletter, you agree to our