The four most important words in investing are probably "I have no idea". I have no idea what the market will do next. I have no idea if we’ll have a recession this year. I have no idea when interest rates will rise. I have no idea what the Fed will do next. Neither do you. The sooner you admit that, the better. — Morgan Housel History … reveals the remarkable, if essential, linkage between the cumulative long-term returns earned by business — the annual dividend yield plus the annual rate of earnings growth — and the cumulative returns earned by the US stock market. Think about that certainty for a moment. Can you see that it is simple common sense? Need proof? Just look at the record since the 20th century began. The average annual total return on stocks was 9.6%, virtually identical to the investment return of 9.5% — 4.5% from dividend yield and 5% from earnings growth. That tiny difference of 0.1% per year arose from what I call speculative return, depending on how one looks at ...
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