Never surrender

What have we learned in the past thirty years?

Besides witnessing a shocking degradation in popular musical tastes (Drake? Harry Styles? Snow Wife? Seriously?) we’ve been through a boatload of financial stress. The toll this century alone: Y2K. Then Nine Eleven. The dot-com meltdown. The Credit Crisis. The toppling of Wall Street banks. A global pandemic. Post-Covid inflation. Two recessions. Real estate FOMO. Two Trumps. War in Ukraine. War in Iran. And a global trade war. Then an energy shock.

During this time, investors who invested (not saved) and ignored the noise, the temporary crashes and all the screaming outside, did great.

Since 1999 the S&P 500 has returned 508%. That’s an annual compound annual growth rate (CAGR) of 8.2%. Even factoring in inflation, the annual give was 5.5%, eclipsing savings vehicles.

Making this even more memorable (unlike, say, Bad Bunny) was the fact there were two ‘lost decades’ for the market during this time. A bear brought on by the dot-com debacle saw substantial losses in 2000 (-14%), 2001 (-13%) and 2022 (-23%) and the recession of 2008 –  hatched by the American housing collapse – cost the market 38%.

History shows people who lost their nerve and bailed during those storms turned paper losses into real ones and, more importantly, missed the stunning recoveries and growth that followed. This is why humans suck at investing. We get excited and buy high, then panic and sell low. Meanwhile the steady, unemotional money keeps making more money, decade after boring decade.

This brings us to the evening of Thursday, April 22nd, 1999. At 7:30 pm. In a dreary place called the Admiral Inn, in the town of Lindsay, Ontario.

John was there. So was I.

Yesterday he wrote me. “Reading your “Trailer Hitch” column, I couldn’t help smiling when you mentioned those old tours from thirty years ago, where crowds came to hear you talk about investing,” he reported.

“I am writing to you as a long-time follower and admirer of your work to share a remarkable piece of financial nostalgia. While recently cleaning out some old paperwork, I uncovered this original flyer.”

“You were the high-profile, guest speaker that evening,” he says. “Looking back, that night was a huge turning point for me, though perhaps not in the way the host intended.”

Indeed. John signed up with the financial advisory company that hired ne to speak that night. It did not go well. “Unfortunately, the advice my family received afterward was the exact type of toxic, high-fee, hyper-volatile portfolio concentration that you’ve spent decades rightly railing against. In our case, it was applied to our children’s RESP’s when they were only a couple of years away from attending university – a total violation of basic suitability.”

That, he says, jolted him into action. Once ETFs became available, he jettisoned the mutual funds plus the fund salesguy who promoted them and seized control of his own destiny. “The tools now available have rewritten the rules,” he says. And it is so true. The best we had 27 years ago – which the majority of Canadians cling to still – is not good enough. Unless you happen to be a bank.

“I wanted to send you this flyer as a token of appreciation,” adds John. “Seeing you on that stage many years ago, planted a seed, and reading your insights over the decades helped reinforce the path I eventually took. I thought you might appreciate the trip down memory lane and proof that, in a roundabout way, your message truly hit home. Thank you for your years of candor and dedication to Canadian investors.”

And that’s how I saved John by leading him astray.

About the picture: “Hi Garth, local follower from Dartmouth,” writes Sreve. “My brother introduced me to your blog several years ago and I’ve been following since. I retired 6 years ago at 54 with a city DB pension and little invested but I do own 7 rental properties and have watched them double in value since retirement. I agree it’s not wise to invest heavily in one commodity but I’ve been at it long enough to have great equity and don’t have to worry about market corrections. I have no clue how anyone can get into it today as rents don’t cover new house values and we’re also seeing little activity when places are listed for rent. Two years ago I’d plan on being busy for an entire day replying to inquiries and now crickets. I’ve owned some of them for close to 20 years but the recent real estate market made more for me than any renos I’d completed. Here’s a photo of my daughter’s Pot Cake dog she thinks she “rescued” from St. Lucia. Not sure what the dog would say if asked.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/05/31/never-surrender/