文章作者持有CL，JNJ，KMB， KO， PG超过30年，在过去的30 年的时间里有许多机会可以在非常好的价位买到这些股票，在今后的30年里也还会有许多机会可以在非常好的价位买到这些股票。
Summary
- It is amazing to discover how much can be accomplished when given enough time.
- The cliché "It's not about timing the market, but time in the market" has never been more true.
- Investors might want to embrace a more long-term investment strategy to accomplish more.
Introduction:
I just got back from a road trip to the Grand Canyon, with my youngest daughter. We had a blast, because one of the requirements of being on that trip was the elimination of any modern electric device and the complete withdrawal from any "social media."
That meant, no use of cellphones, except to call mom and let her know that we were okay, but no texting, Internet searches, or anything else that you can do with a cellphone other than actually phoning someone.
For 10 days, we went completely old school. While driving to the canyon, we actually spent time talking to one another, listening to the AM-FM radio and singing along to mostly "classic" rock, making pit stops for the usual reasons, and exploring interesting sights along the way.
When we made it to the South Rim of the Grand Canyon and began our exploration, the first view of the actual canyon left us almost speechless. If you've never actually seen the canyon "in person," the first thing that strikes you is the size of the canyon. It is unbelievably huge.
If you take the time to hike down into the bottom of the canyon and you look back up at where you began, it is likely that you will begin to appreciate just how small you are, relative to your place in the cosmos.
Indeed, it was a humbling experience to grasp the notion that a trickle of water, given enough time, could carve its way through more than 3000 feet of earth and create this amazing place.
What I Know:
I took away a lot from this trip, but I think that the "nature of time" was the most profound lesson, for me. As an investor, we sometimes overlook the nature of time and how, given enough time, anything is possible.
Thirty years ago is not a long time as compared to the time it took to produce the Grand Canyon. But in terms of human longevity, 30 years is almost half a lifetime. When you consider average life expectancy for modern day Americans, you can appreciate the fact that most of us are going to be lucky to reach the ripe old age of 80.
There has been a regular debate on the pages of Seeking Alpha as to the benefits of passive investment strategies as opposed to active investing strategies. Proponents of both strategies have strong arguments, both pro and con for either.
When we look at the performance of individual stock portfolios vs. index-based portfolios over the last 5 years or so, one can find that indexing has been a very good option for many investors. But, when we look at a longer window of time, it is easy to make the argument that a portfolio of individual stocks can provide a very challenging argument for the "other side."
What You Should Know:
I guess the benefits of each depends on how one approaches investing. For me, when I choose to purchase stock in a particular company, I have made the decision to become an owner in that company. As an owner, my perspective dictates that I am going to own my portion of this company as a long-term investment and not as a quick trade. By the same token, if I were to invest in an index, my intentions would be to hold that index for a long period of time as well.
I have owned stock in Coca-Cola (NYSE:KO), Colgate-Palmolive (NYSE:CL), Kimberly-Clark (NYSE:KMB), Procter & Gamble (NYSE:PG) and Johnson & Johnson (NYSE:JNJ) for more than 30 years. I have added to my positions in these companies over the years, and they represent the largest holdings in my retirement portfolio.
While I have also added positions with other companies over the years, to end up with a current portfolio of 40 companies, my focus here is going to be on the companies that I have held for the longest time and to look at the performance of those companies over the time that I've owned them.
The Case For Indexing:
When we look at specific time periods, it would appear that the approach we take to investing in our favorite companies, relative to a similar investment in a basket of stocks, represented by an index can have some interesting results.
The Five-Year Window:
| Performance Summary, Jan 2010 to Dec 2014 (5-Year Performance) | ||||
| Symbol | Name | Initial Investment | Ending Value | Annual Return |
| CL | Colgate-Palmolive | $1,000.00 | $1,899.81 | 13.70% |
| JNJ | Johnson & Johnson | $1,000.00 | $1,912.69 | 13.80% |
| KMB | Kimberly-Clark | $1,000.00 | $2,275.56 | 17.90% |
| KO | Coca-Cola Company | $1,000.00 | $1,712.47 | 11.40% |
| PG | Procter & Gamble | $1,000.00 | $1,758.02 | 11.90% |
| SPY | SPDR S&P 500 | $1,000.00 | $2,041.40 | 15.30% |
As we can see, SPY has been a very good investment over the last five years and the only company in my "Jackson 5" that outperformed SPY was Kimberly-Clark .
The 10-Year Window:
| Performance Summary, Jan 2005 to Dec 2014 (10-Year Performance) | ||||
| Symbol | Name | Initial Investment | Ending Value | Annual Return |
| CL | Colgate-Palmolive | $1,000.00 | $3,409.11 | 13.00% |
| JNJ | Johnson & Johnson | $1,000.00 | $2,211.24 | 8.30% |
| KMB | Kimberly-Clark | $1,000.00 | $2,701.29 | 10.10% |
| KO | Coca-Cola Company | $1,000.00 | $2,613.30 | 10.40% |
| PG | Procter & Gamble | $1,000.00 | $2,173.23 | 8.10% |
| SPY | SPDR S&P 500 | $1,000.00 | $2,081.69 | 7.60% |
This is more like it. Every one of the "Jackson 5" outperformed the index over the last 10 years. Now, I have to admit that Johnson & Johnson and Procter & Gamble were the individual stock selections that were the low achievers.
The 15-Year Window:
| Performance Summary, Jan 1999 to Dec 2014 (15-Year Performance) | ||||
| Symbol | Name | Initial Investment | Ending Value | Annual Return |
| CL | Colgate-Palmolive | $1,000.00 | $2,882.33 | 7.30% |
| JNJ | Johnson & Johnson | $1,000.00 | $3,252.11 | 8.20% |
| KMB | Kimberly-Clark | $1,000.00 | $2,983.34 | 7.60% |
| KO | Coca-Cola Company | $1,000.00 | $2,107.20 | 5.10% |
| PG | Procter & Gamble | $1,000.00 | $2,425.58 | 6.10% |
| SPY | SPDR S&P 500 | $1,000.00 | $1,844.44 | 4.20% |
Here's where we can see the benefit of the additional time in the market. All of the stocks in the "Jackson 5" performed better than the index. But, wait. It gets better.
The 20-Year Window:
| Performance Summary, Jan 1995 to Dec 2014 (20-Year Performance) | ||||
| Symbol | Name | Initial Investment | Ending Value | Annual Return |
| CL | Colgate-Palmolive | $1,000.00 | $12,986.79 | 13.70% |
| JNJ | Johnson & Johnson | $1,000.00 | $11,908.26 | 13.20% |
| KMB | Kimberly-Clark | $1,000.00 | $8,650.57 | 11.40% |
| KO | Coca-Cola Company | $1,000.00 | $5,028.38 | 8.40% |
| PG | Procter & Gamble | $1,000.00 | $9,295.99 | 11.80% |
| VFINX | Vanguard Index 500 | $1,000.00 | $6,427.55 | 9.80% |
We had to replace SPY with VFINX as we wanted to have the same period of time to compare the stocks vs. the index. Again, the results of the "Jackson 5" with the exception of Coca-Cola outperformed the index.
The 25-Year Window:
| Performance Summary, Jan 1989 to Dec 2014 (25-Year Performance) | ||||
| Symbol | Name | Initial Investment | Ending Value | Annual Return |
| CL | Colgate-Palmolive | $1,000.00 | $29,414.53 | 14.50% |
| JNJ | Johnson & Johnson | $1,000.00 | $24,375.59 | 13.60% |
| KMB | Kimberly-Clark | $1,000.00 | $14,012.22 | 11.10% |
| KO | Coca-Cola Company | $1,000.00 | $14,538.19 | 11.30% |
| PG | Procter & Gamble | $1,000.00 | $18,459.18 | 12.40% |
| VFINX | Vanguard Index 500 | $1,000.00 | $9,665.98 | 9.50% |
Again, the impact of time in the market plays out with performance for each of the investments in individual stocks beating the index. Significantly.
The 30-Year Window:
| Performance Summary, Jan 1985 to Dec 2014 | ||||
| Symbol | Name | Initial Investment | Ending Value | Annual Return |
| CL | Colgate-Palmolive | $1,000.00 | $90,215.83 | 16.20% |
| JNJ | Johnson & Johnson | $1,000.00 | $89,957.29 | 16.20% |
| KMB | Kimberly-Clark | $1,000.00 | $50,840.04 | 14.00% |
| KO | Coca-Cola Company | $1,000.00 | $62,699.41 | 14.80% |
| PG | Procter & Gamble | $1,000.00 | $54,532.80 | 14.20% |
| VFINX | Vanguard Index 500 | $1,000.00 | $20,199.30 | 10.50% |
I think this table shows the relative value in the concept of "time" with an investment. Each of the "Jackson 5" stocks has provided a significant return of $1000 invested 30 years ago.
Summary and Conclusion:
While I count myself a Dividend Growth Investor, perhaps my approach to the strategy may be a little more nuanced than the approach taken by others of the same mindset.
I want to purchase stocks in companies that are businesses that I would like to own, even if my purchase represents only a small and somewhat insignificant percentage of that business.
I want to purchase companies that are priced at a value to what I believe is their intrinsic net worth at the time of my purchase. In a simpler form, I want to purchase stocks in great companies when the stock is on sale.
I want to hold my stock purchases for the long term. Unless something dramatic happens to the basic fundamentals of the company, I am not in a selling mode. I don't sweat the small stuff. Companies are continuously being managed by people who are expected to produce results. The best companies in the world are always on a mission to improve results.
I do not focus on the price of the stock (although it is almost impossible to not see the relationship between price/value). Sometimes there is a good reason for a stock to be available at a given price. But cheap does not always translate into value.
Take a long-term approach to investing and before you know it, your "trickle of water" might just produce a Grand Canyon portfolio that you can enjoy in your retirement years.
