From Greg Wilson, chief analyst, the Legacy Portfolio: You’d have to go back 75 years to find a sell-off as violent as last week’s.
According to Bespoke Investment Group (a quantitative research firm), “Not even the crash of 1987 got this oversold relative to trend.”
It’s the type of action that causes investors to panic.
But you shouldn’t.
Regular Daily readers know the Legacy Portfolio is the safest, surest way to amass substantial wealth in the stock market.
As Legacy investors, we invest in high-quality dividend-paying (and dividend-raising) companies. We buy at good valuations. And we invest for the long term.
We won’t be selling today… or tomorrow… or likely ever. So, we can ignore all current market “noise.”
We know it’s normal for stocks—and even our Legacy holdings—to make big percentage moves…
Consider “superinvestor” Warren Buffett’s famous 1988 investment in The Coca-Cola Co. (NYSE: KO). Shares of global dominator Coke have dropped over 15% on a dozen different occasions since then. On 11 of those occasions, the decline exceeded 20%.
But Buffett stayed the course, and we adopt the same mentality. Here’s why:
Buffett took his 1988 stake in Coke at a cost (adjusted for splits and dividends) of $3.75 per share. By 2011, Coke’s adjusted dividend payout was $1.88 per share.
That means his annual dividends alone garnered him a 50% return on his original investment. It’s even higher today… Coke has increased its dividend for 53 consecutive years.
In the Legacy Portfolio, we own high-quality stocks that rebound quicker than most. These companies dominate their industries and possess extreme competitive advantages. They’re the most reliable, highest dividend-paying (and dividend-raising) companies on earth.
That keeps them filling our pockets, no matter what the stock price is doing.
Bottom line: If you’re a panicked Legacy investor, take a deep breath. Remember, we invest for the long term. We invest in high-quality dividend-paying companies. And we buy at good valuations. Stay the course… and use others’ fear to accumulate more shares.
Reeves’ Note: The Legacy Portfolio has added a new feature called the Legacy Multiplier. This tool identifies the discount levels for each Legacy stock. It shows you when quality assets go “on sale.” Right now, several of Legacy’s prizewinners have fallen into deep-discount range. Legacy subscribers can access the Multiplier tool in the portfolio, right here.
The Legacy Portfolio is now closed to new subscribers, but you can join the waitlist right here. You’ll receive updates and insight on the Legacy investment strategy from Mark, Tom, and Greg. And you’ll get the first crack at signing up at a discount during the Legacy Portfolio’s next “open season.”