Jump onboard the stock market express

In simple terms, when you purchase one share in the stock market, you become an owner. You become an active participant in that company. These companies are managed by experienced professionals and it's their role to enhance the value of that company over time. They do this through the continual production and ultimate consumption of the goods and services they produce. From textiles to oil, electricity, social media, entertainment, you name it, there's a company out there on the stock market that does it.

What’s important to understand, is that this is one continual great advance that does and will continue to power on relentlessly. Like a shiny new bullet train, sleek, slender, with smooth curves and optimised for increased efficiency, this is a train that charges on down the tracks. That's not to say we don't have moments where a stop off at the station might be required; an oil change perhaps; to pick up or drop off the participants on the great advance journey. You see some experience a bit of motion sickness along the journey and can't quite stomach it. Others opt for the sick bag, whilst the rest stare directly out of the window, do nothing but smile, and enjoy the journey.

It's an intriguing route we take, passing through the depths of Great Depressions, Dotcom Bubbles, Great Financial Crashes, and in more recent times, Covid-19, to name a few. Torturous mountain passes that test the nerve and rational of even the most seasoned of travellers. It slows the train, sometimes we might even temporarily move backwards, around 25% of the time, according to history. The other 75% of the time we charge onwards, continuing to scoop up human ingenuity, constantly innovating and increasing efficiency as we go.

The stock market is the greatest wealth creator there is. It has provided investors like you compounded long term returns of 3 times the rate of inflation, that's c 12% per annum. In comparison, those we left at 'station of safety' may have decided 1% was more their thing – that's current returns on an easy access cash account (if not less). Of course, no one told them about our sneaky old friend called inflation – like a speedometer racking up the miles, the prices of the goods and services we produce continues to rise. With a current inflation target in the UK of 2%, we can see how your wealth can start to be eaten away at the 'station of safety'.

How safe is cash really, I ask you? For immediate needs, up to c 5 years, cash is great, it's there for when you need it. Beyond that point, we start to see the real risks at play and the costs of not jumping on the stock market express.

That’s why I write to you today and urge you to embrace the positive inflation bursting power of the stock market. Understand the positive long term potential and how you can use it to your advantage.

You see that train will charge on relentlessly, whether you jump on board on not. Do you want to be left at the station, the darkness of inflation pulling you in, or would you like to burst free and take the ride of your life? I can't guarantee you it'll be a smooth journey, temporary unknown perils await, but I can tell you if you stay strapped in, lean in, and embrace the journey you'll participate and have the opportunity to benefit from the greatest advance known to man.

Here at Spentwell, we embrace the power of the stock market and use it to your advantage, building wealth over the medium to long term, utilising some of the best tools available to generate wealth for you in as tax-efficient way as possible. You could call it the first-class lounge – the difference is there's a seat available for everyone on this journey. You just need to decide if you'll buy a ticket.

Is it time for you to jump on board? Get your ticket stamped at team@spentwell.co.uk and we'll make sure we get you moving in the right direction.

Keith

Managing Director

Spentwell.

Guidance only. Investing in the stock market does carry a degree of risk and returns are not guaranteed. Be aware and understand the risks involved before participating. If in doubt, please seek professional advice.

Source: The data referenced in this post has been taken from research conducted by Finalytiq – History of the Markets. Data available on request.