Why Invest In Stocks?

Why Invest In Stocks?

Why Invest In Stocks? 1125 750 Jonathan Poland

Over the last 100 years, the Dow Jones Industrials have risen created 213x return. $97 investment is now worth $21,000. The power of this industrial and technological machine called America is truly special. Yet, with such amazing performance over the last 100 years, less than half of the population puts money into the stock market.

I view equity investments in terms of company profiles. Some companies have profiles that make them good investments, others do not. I do not believe that equity investments should take the form of charting a price to determine direction or relative strength, rather be thought of in terms of long-term holdings bought at prices that can provide a margin of safety and capital appreciation in excess of what the overall market can provide.

For the Dow and S&P, that’s between 8–10% year, on average. Compared to the historic rise of the overall American housing market, it’s 100–150% better every year. A good rule of thumb is to only make equity investments that are capable of doubling in value every 5 years. If you’re not good at finding those, simply buying a market index will beat most other assets you would ever think about buying.

Want to know how and what to buy?

Outside of my investment guide, a good place to start is Warren Buffett’s annual shareholder letters. They date back to 1977 and document the rise of Berkshire Hathaway into the global powerhouse it is today. Read all 40 and you’ll get a much firmer grasp on how to evaluate equity investments from the best investor ever.

You can also pick up the Intelligent Investor by Ben Graham, Buffett’s mentor. I like the site Finviz for screens, Morningstar for analysis, and read the news from over 20 resources daily.

The Bottom Line: Investing in equities generally produces better results than any other major asset class.


For 15 years, I published a monthly

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to a select group of investors.

The results speak for themselves.

Performance History

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Performance results are unaudited pre-tax figures based on buy and sell prices at the time of publication and may vary from actual trade prices by subscribers. Trade ideas were issued via email and various pdf files. My goal has always been to highlight investments that can collectively deliver 100% gains over a 3 to 5 year period. These are typically stocks, but may include options, commodities, real estate, and other investments where I feel confident in my analysis. If you have any questions, get in touch.
Disclaimer: I am not a registered investment adviser. Under no circumstances does any information published in my newsletter represent a recommendation to buy or sell a security. The information on this website is not intended to be, nor does it constitute, investment advice or recommendations. In no event shall I be liable to any subscriber, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on this website or its related newsletters, or relating to the use of, or inability to use, this website or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. Past results do not guarantee future performance.
Note: My research is and has always been of a general and impersonal nature, in that the advice provided is not attuned to any specific portfolio or any client’s particular needs; and is of general and regular circulation, in that it is not timed to specific market activity or to events affecting, or having the ability to affect, the securities market.