The weekly digest — 16.10.24

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 become entitled to our dividend from Procter & Gamble (P&G) this week. P&G is a blue-chip stock and dividend growth champion; the 186-year-old company has paid dividends for 134 years with a history of 68 years and counting of dividend increases. Originally a soap and candlemaker, P&G has always been an advertising pioneer and a company of firsts. For example: how did soap operas come to bear their name? P&G was the first company to sponsor serialised radio programs, such that they became synonymous with the company and are today known as soap operas. Incredible marketing feats such as this have made the company one of the most widely studied and highly reputable world leaders in brand management, routinely ranking among the world’s most admired companies across career opportunities and best places to work. P&G’s innate spirit of innovation, exemplified in further firsts (the company was the first to introduce fluoride in toothpaste; ditto disposable diapers), coupled with its masterly brand management and scale leadership have shaped a rare trinity of business traits that have generated more than $84 billion in annual sales and underpin a likely extension of P&G’s future success.

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.