The Financial and Personal Security Letter
As I write to you, I am enjoying a musical experience that I duplicated decades ago. And the foundation of this enjoyment is simplicity. On the investment front, the same simplicity prevails today as it has for decades. Over two decades ago, I read a Forbes article that I have kept and often refer to investors. The article profiled the manager of the tiny Beacon Hill Fund, David L. Stone, and the model of simplicity he lived by. As he put it, "People ask me what I do all day. Well a decision to do nothing is still a decision." In my own accounts, I have not recorded a sale this year, nor did I record a sale for investment reasons last year. Thus, I have not turned over one red cent, due to trading, to the profligate government in Washington.
In this month's issue, I'll tell you how you can get ahead of the game the David L. Stone way. In a word, the secret is patience. Hold costs and transaction activity to the minimum and allow interest and dividends to work for you through the mathematical miracle of compounding. Meanwhile, health care will play an increasingly larger role in America's economy, with health care spending projected to increase to $5 trillion by 2022, or 19.9% of GDP. Investors can't afford to ignore an industry representing one-fifth of the economy. I'll tell you the safest way to buy into it. Also this month, I'm dropping one name from the Monster Master List this month. The stock has gone parabolic, with shares up more than 120% over the last two years, and valuations look stretched. More >>
Each month, I provide you with an Economic Analysis supplement to the issue. This supplement provides you with a bird's eye view of the indicators that I monitor on a regular basis. The incisive, story-telling charts included in this supplement are updated every month and range from "The Leaders" to "World Currency Reserves/World Gold Reserves." There will always be great new material as well as timely reference dates, and my comments spell out the meaning of each chart for you. Download in pdf format.
Dick Young grew up in Shaker Heights, Ohio, graduated from Babson College in Wellesley, Massachusetts, with a B.S. in investments, began his investment career in 1964 with Clayton Securities in Boston, and founded Young Research & Publishing, Inc. in 1978 to publish Young's World Money Forecast. More »
I have been a subscriber of Intelligence Report since 1992. I began investing for retirement using guidelines from Intelligence Report. I followed Richard's advice and switched everything to Vanguard in 2006 and wish I had done it sooner. With about 35% Retirement Compounders and the rest in Vanguard GNMA and Vanguard Short-Term Investment-Grade, I was able to fly through the recession. Average return for the last 5 years was 5.7%.
I retired from dentistry in 2010 after 43 years in my office, and since that time we are living off my investments and Social Security. We have about as much to live on as when I was working, because I don't have to pay those high taxes. I stick with the program and have not had to use any principal for living expenses.
I am glad that I stumbled upon your letter in 1992, because I was able to develop a philosophy for investing and a plan to stick with through thick and thin. It has paid off very well. Thank you.