Earlier today, MarketWatch highlighted the rather blunt investing advice that the ‘highly reputable’ investing newsletter, The Prudent Speculator, and its editor, John Buckingham, recently offered up to millennial investors:
‘If you are 50 or younger, or have 10 years before taking money out, and do not have 100% in equities, you are crazy.’ And while we can certainly appreciate his attempt to achieve crystal clarity with his terse investing advice, the underlying message (i.e. put all of your money in equities right now or you’re a complete idiot) strikes us as slightly less than “prudent” and bordering more on “completely moronic” end of the spectrum. That said, we can understand that “The Completely Moronic Speculator” probably doesn’t have the kind of market appeal that Buckingham was shooting for.
Before we dive into the details of Buckingham’s justification for his rendition of the “Buy The Fucking Dip” strategy, we thought it would be ‘prudent’ to provide some historical context for his controversial call. His underlying premise is very simply that if you invested money in equities in 1927 you would have achieved average annualized returns of ~10% through 12/31/16. And, since it worked in the past, it will necessarily work for those looking to put money to work today as well.
To summarize, here is visual representation of Buckingham’s investing call for millennials:
This post was published at Zero Hedge on May 3, 2017.
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