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Lookout Below
Prognostication, particularly about the future, is difficult. Do not try it at home with your hard-earned money.
That is how we have learned by multiple gut and heart-wrenching financial mistakes over our last half century in the markets that saving half of income and automatic dollar-cost averaging growing dividends, particularly when most people are despondent, is safer than anything else.
So what if Exxon Mobil, the largest energy company in the world, with the lowest price reserves, 33% return on equity, 10% growth in 2% dividends, and 10% earnings yield, falls from 94 to 55 or lower?
Meanwhile XOM develops oil and gas fields in Alaska, Brazil and Canada, along with battery and hydrogen energy technology. Yes, XOM suffers properties nationalized from time to time by greedy dictators, which presents buying opportunities. They are an ethical corporation who treat their customers well and put employees through spiritual progress workshops. They pay most of the fees for Direct Stock Purchase (DSP) and Dividend Re-Investment Plans (DRIP).
https://www-us.computershare.com/Investor/Plans/buyshares.asp
With very low-cost automatic monthly investing, we buy more shares at lower prices, guaranteeing better returns over the long-term than most active or passive investors.
In The early 1980s, All American Market Analyst Bob Farrell wrote an essay, Weep Not for the Individual Investor. He recited conventional wisdom that small odd lot investors sold short at the bottom and bought at the top. Many do. His internal data from the largest investment firm in the world found that cash buyers outperformed all others in margin accounts.
A former Nobel Prize Winning Client and his colleagues had the long-term statistics to show passive index funds with low expenses outperformed active asset and market timers, with few exceptions such as bankruptcy reorganizations, dividends, IPOs and small cap values. This is true during bull markets which go up most of the time.
