Sir John Templeton, one of the most successful investors of our time, once said, ““The four most expensive words in the English language are, ‘This time it’s different.'”
What he meant was that if you think your investments are going to skyrocket forever, you’re probably going to be wrong, and it’s probably going to cost you.
He also meant it in the inverse: if you think your investments are going to plummet and never recover, you’re probably going to be wrong, and it’s probably going to cost you.
I would be lying if I told you that I didn’t wonder if indeed “this time was different” as a deadly virus was enveloping the world in early 2020 and markets were crashing. That fear existed more than I care to admit.
However, I had studied Sir John Templeton’s work and track record, amongst others, enough to wager that it wasn’t going to be different, and that markets would recover and then go on to reward long-term investors.
That wound up being the right call, if only by the Grace of God, or the Federal Reserve, depending on who you worship.
In the midst of 2022’s rough start to the year, I’m going to make the same wager today. Not because I’m smart or even certain of that stance, but because investors that are infinitely smarter than I, Sir John Templeton included, had always made the same choice, and were better off for it.