How to Money · Wednesday, August 26, 2026
Joseph Moore highlights that the notion of 'stocks for the long run' as always being the best investment strategy is historically inaccurate. He explains that bonds actually outperformed stocks throughout the 19th century, and the dominance of stocks as a long-term investment is largely a phenomenon of the post-World War II era, becoming widely accessible with index funds in the 1970s.
“Right, Yeah, so stocks actually used to be bad for the long run, So people don't you know, we have a great phrase, so why wouldn't we stick with it? But the problem is that it breaks down. So there's been a couple of kind of moments that this idea that stocks for the long run has always worked popped up one s popped up in nineteen teens, and then of course the famous book by Jeremy Siegel. And the problem is not that stocks have not been good for the relatively recent term. They obviously have. It's that a lot of the data sets from before World War Two were hard to put together, and so since those books came out, some academics went and really put together what the real stock market in America looked like back in say, the eighteen hundreds, in the early twentieth century, and turns out bonds actually beat stocks for the entirety of the eighteen hundreds, and they were tied until about World War two, which means stocks for the long run has only been true about as old as our last two presidents are, you know, in age, right, So it's like it's true for about the baby Bimmer generation's length of time, and before that it wasn't true.”
“And so one of the things I call is like the chart every find if you go to a financial advisor, because you want to be a grown up, and they sit you down and they slide you the chart and the dates changed, with the point is always the same. If you had started investing money back then, and you had kept reinvesting all dividends until now, you'd be wildly rich. Mine was nineteen twenty nine. It was like night. That was the first one I was ever given, nineteen twenty nine hype before the depression. If you'd invested ten thousand dollars, reinvested all the dividends, you have ten million dollars today.”
“And so one of the things I call is like the chart every find if you go to a financial advisor, because you want to be a grown up, and they sit you down and they slide you the chart and the dates changed, with the point is always the same. If you had started investing money back then, and you had kept reinvesting all dividends until now, you'd be wildly rich. Mine was nineteen twenty nine. It was like night. That was the first one I was ever given, nineteen twenty nine hype before the depression. If you'd invested ten thousand dollars, reinvested all the dividends, you have ten million dollars today.”