In February 1993, John Templeton contributed an article, “16 Rules for Investment Success (and for your family, house, tuition, retirement . . . )” in World Monitor. At the time this article was published, there were different world issues and economic challenges facing the country, but Templeton’s advice remains relevant today.
In the last rule of the article, included below, Templeton remains optimistic about the economy while acknowledging the likelihood of fluctuation in the market. Given today’s challenging economic times, we should put current events into perspective and remember the insight of Templeton.
And now the last principle: Do not be fearful or negative too often. For 100 years optimists have carried the day in U.S. stocks. Even in the dark 70s many professional money managers—and many individual investors too—made money in stocks, especially those of smaller companies.
There will, of course, be corrections, perhaps even crashes. But, over time, our studies indicate stocks do go up . . . and up . . . and up. With the fall of communism and the sharply reduced threat of nuclear war, it appears that the U.S. and some form of an economically united Europe may be about to enter the most glorious period in their history.
As national economies become more integrated and interdependent, as communication becomes easier and cheaper, business is likely to boom. Trade and travel will grow. Wealth will increase. And stock prices should rise accordingly.
By the time the twenty-first century begins—it’s just around the corner, you know—I think there is at least an even chance that the Dow Jones Industrials may have reached 6,000, perhaps more.
Despite all the current gloom about the economy, and about the future, more people will have more money than ever before in history. And much of it will be invested in stocks.
And throughout this wonderful time, the basic rules of building wealth by investing in stocks will hold true. In this century or the next, it’s still “Buy low, sell high.”
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