John Bogle’s aforementioned advice is habitually disregarded at this time of year, with the financial press breathlessly covering forecasts as to what stocks might fly higher over the coming year. Some ambitious souls go further and forecast the next decade’s big winners, but that’s a nigh-on impossible task.
Recent Bespoke Investment data shows the best-performing S&P 1500 stock over the last decade was Patrick Industries, "a company most people have never heard of". Most of the top 25 biggest winners on Bespoke's list are similarly unknown entities. Granted, some well-known names also make the list, including Netflix and Amazon, which gained some 4,000 and 1,800 per cent, respectively. Still, Netflix fell 82 per cent in 2012 and by more than 30 per cent on 11 occasions since going public in 2002, while Amazon suffered similarly nausea-inducing drawdowns.
Even if you had the foresight to pick tomorrow’s big winners, would you have had the stomach to stick with them?