🧠 The Key Lesson From 2023

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Rewind the clock one year.

Imagine we told you that the following would unfold over the next 12 months:

  • Interest rates would be hiked four times
  • Inflation would remain stubbornly high
  • Predictions by experts of a global recession were widespread
  • Three midsized U.S. banks would collapse, including the 3rd largest banking failure in history.
  • The war in Ukraine would rage on with no end in sight
  • A new war would break out in Israel, taking the world by surprise
  • Major strikes would occur in the U.S. entertainment & auto industries
  • U.S. household debt would reach an all-time high
  • Housing unaffordability would continue to worsen

If you knew all of this doom & gloom was coming, you’d likely predict that investors were in for another rough year.

Yet, here are the market’s current year-to-date total returns:

  • Dow Jones: +14% (all-time high)
  • S&P 500: +26% (all-time high)
  • NASDAQ: +45% (within 5% of an all-time high)

If you study market history, you see that this dichotomy appears often.

Markets have soared when the economy looks weak (and has tanked when it looks strong.)

That’s because markets are unpredictable. Always have been. Always will be.

Yet, the undeniable long-term trend of the market is predictable: up.

That fact is the very reason we named this newsletter Long-Term Mindset. It serves as a reminder to us to stay focused on the only time frame that truly matters: the long-term.

That isn’t easy to do, especially in our highly connected world. There are always ample reasons to be short-term bearish.

But history shows that it’s the long-term optimist that comes out on top. Those who can stay invested in spite of the world’s short-term problems stay in the game long enough for compounding to work its magic.

2023 showed us yet again that investing isn’t easy.

And it’s not supposed to be.

Wishing you investing success in 2024 & beyond

– Brian Feroldi, Brian Stoffel, & Brian Withers

P.S. If you have a few minutes, we had fun making this short video:

video preview

Together with Finchat:

I (Feroldi here) am a huge fan of visuals. A good chart can relay information 10x faster than numbers or text alone. That’s why I’ve recently become a power user of Finchat.

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Finchat also allows you to take advantage of cutting-edge AI, drastically speeding up my research process. Finchat is free to try, but the site is so useful that I happily pay for its premium features.

Want to try it? Use this link to sign up and knock 25% off the annual price.

One Simple Graphic:

One Piece of Timeless Content:

One of our favorite financial writers, Morgan Housel, discusses the surprising downsides of becoming rich.

One Thread:

Want to help your kids become financially independent?

One Resource:

Traveling for the holidays? Brush up your rights as a consumer by listening to this podcast episode. Erika Kulburg talks with U.S. Secretary of Transportation Pete Buttigieg about what to do if your flight is delayed, if your bag doesn’t arrive on time, and refund policies on canceled flights.

One Quote:

More From Us:

👨‍🎓 The next cohort of our flagship course, Financial Statement Explained Simply starts in January 2024! Click here to join us.

📗 If you’ve read Brian Feroldi’s book, he’d love a review.