Stocks can make you rich
War can make you richer
The long term benefits of compounding wealth in America’s stock market is well documented; the long run rate of return of The S&P 500 is roughly 10% per year, or about 6% to 7% annually when adjusted for inflation. Why does this happen? We can turn to an Old Wall Street expression to explain it
THE GAME IS RIGGED TO THE UPSIDE
which was commonly uttered in my circles when markets made unexpected and positive moves to the upside. And when markets dropped we swore, openly and proudly. Which is why to this day I have to be very careful when speaking publicly, and why although I’m often on television I refuse live broadcasts. This, and many other
OLD WALL STREET EXPRESSIONS
will be discussed in future articles. The minutiae of Wall Street unknown to outsiders is both broad and deep, what else can I say but we do like our secrets. Clearly buying and holding stocks (nope, not trading) is a way to build wealth, and buying and holding the entire S&P 500 via low cost index funds is a superb way to get rich slowly. But what if
YOU WANT TO GET RICH FASTER?
The answer is pretty simple: invest in war. The chart below shows the performance of The S&P 500 and two subsets over the past 20Y
ITA is an Exchange Traded Fund (ETF) tracking the Aerospace and Defence sector. BIX is The S&P Banks Select Industry Index which tracks the banking sector. Over
THE LAST TWENTY YEARS
The S&P 500 was up 372%, BIX was up 20%, while ITA was up 806%. The lesson is clear: if you want to get rich, hold The S&P 500, if you want to get rich faster, invest in war and, for all the bad press we get
BANKERS ARE A POOR INVESTMENT
But seriously, war is hardly a socially beneficial investment. Not compliant with the emergent standards of Environmental, Social , and Governance (ESG) investing at all. And even though I’ve long been aware of this sector’s over performance I’ve avoided it, preferring to put my own money to work in three ways, I tend to focus my investments to
1) Give people food to eat or
2) Give people clothing to wear or
3) Give people a home to live in
But, if you wanna invest in war
THAT IS BETWEEN YOU AND YOUR GOD
I would just ask you to pause for a moment.
And think of the unappreciated bankers.
Yes, please. Invest in us.
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