The weekly digest — 04.09.24

A Winning Machine

What is more powerful than a 101-year-old winning machine? Since 1923, the S&P500 index has generated an annualised return of ~10.5%. For more than a century, it has:

• Beaten 99.9% of professional investors, who typically underperform the index annually by ~2-3%, with the gap widening dismally over time.

• Proven its stellar compounding potential; $1 invested in the index in 1923 would be worth more than $13,000 today.

• Comprised of the bluest of the world’s blue-chip stocks, self-regulating and re-weighting these in line with their individual performances — eliminating user selection error.

• Always regained its previous highs, surviving the Great Depression, one World War and the Covid pandemic.

Weekly Digest

On a look-through basis, we will receive our dividend from Aflac this month. Aflac, an exceptionally consistent dividend performer, has raised its dividend each year for the last 41 years at an average annualised growth rate of around 9 per cent. How does a company achieve this? It began with humble beginnings. In 1955, in Columbus, Ohio, a trio of brothers from the Amos family set out to solve the challenge of medical costs uncovered by traditional health insurance. From there, Aflac grew into a global powerhouse, eventually entering Japan in the 1970s, where it became a spectacular success. Today, Aflac remains the leading dread-disease insurer in Japan with a market share exceeding 40 per cent. Its footprint is so ubiquitous that it is sold by Japan Post in every post office across the country. Elsewhere, in the US — where it has scored among the most admired, most ethical and most reputable companies — its legacy pervades American society. For example? The company’s ‘Aflac duck’ advert, launched on New Years Day 2000, transcends its time with more than 90 per cent recognition registered among US adults today.

To Have and To Hold

The greatest threat to our investment success? Us. So, how do we get ourselves from outset to outcome? Over four years, we’ve collected more than four million data points that demonstrate how a particular methodological communication keeps investors on track. This email is part of a powerful anticipatory feedback loop that works as a bad-decision buffer. With our handholding, evidence shows investors are far more likely to hold onto their investments — long enough to enjoy their wins.