Why Time is Transformational

From Sept. 12, 2008 to yesterday, the S&P 500 is up 185.9%, or 11.08% annualized. Your money nearly tripled in 10 years. From Sept. 12, 2008 to March 9, 2009, the S&P 500 lost 45.15%. You lost almost half your money in less than six months. You can't have one without the other.
— Jason Zweig (@jasonzweigwsj) September 12, 2018

Amazon

Jeff Bezos loves the phrase “Day 1” so much that he named an Amazon HQ building after it. Twenty years into what is now a trillion dollar company, Amazon still considers it “Day 1” of its journey.

While that phrase may be easily dismissed, it reflects one of the company’s foundation principles: time.

The power of time is everywhere in markets.

Investors can buy and sell. They can also buy and hold. Two strategies separated by time.

If you invested $1000 in the S&P on 9/12/08 and sold on 3/9/09, you would walk away with $500. No one would blame you. The market was in free fall.

But if you held that position — through the collapse and subsequent rise — it would now be worth nearly ~$3000.

One time-based decision and two very different outcomes.

Warren Buffett says that the most important piece of information for investing is price. The second most important piece of information is projected time horizon.

If we can lift our head from the daily grind, the data tell us that economic progress is inevitable. It may just take a while.