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In this episode, we take a deep dive into the timeless approach of equity ownership for wealth building. It's all about cutting through the noise and focusing on the proven success of investing in the finest companies worldwide.

I tackle the 'this time is different' myth head-on, offering historical evidence that demonstrates the resilience of shares through economic ups and downs. I'm here to equip you with the mindset to stand firm in your investment decisions, even when headlines and market fluctuations test your resolve.

By joining me, you're not just listening to another finance podcast—you're stepping into a space where we confront economic uncertainty with informed strategies that have stood the test of time. I'm genuinely thankful for you walking this path with me toward investment enlightenment.

In our journey together, I stress the importance of conviction in your investment choices and the power of compounding for your financial legacy. The goal here is to share knowledge that empowers you to build and secure long-term wealth, beyond the short-term volatility that can so easily distract.

So, if you're ready to reaffirm your belief in the value of global shares and want a companion in navigating these sometimes stormy investment waters, this is the episode for you. Let's reinforce our financial acumen together.

Remember, this isn't just about money—it's about sustaining prosperity and enabling philanthropy through savvy investing. Join me as we continue to build on these crucial concepts.

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https://youtu.be/sT8OKHxjEN0

Key Takeaways

00:00 Owning Great Businesses for Long-Term Wealth

11:41 The Power of Belief in Investing

16:45 Ownership of US and World Shares

Tweetable Quotes

"Every rational, profit-seeking business does two things we can't imagine the stock market doing. First, rational profit-seeking businesses refuse to lose money any longer than they have to. When an event occurs, the business is acting to protect investors' capital and position for recovery. Every employee, every manager, every executive, and every board member are thereto protect and grow investors' capital."

"The five beliefs which I hope you're going to save and revisit are truths about how the world economies and markets work. They are factual, they are foundational, they're based on evidence. 'This time is different' is always an attempt to separate you from that history and evidence."

"Believing the five, you believe in something more powerful, more true, more real, more enduring than headlines, and you cannot be scared out of your genuinely well-asset allocated and broadly diversified portfolios of the great companies of the US and the world. Not being scared out means never having to decide when to re-enter and it means never interrupting the most powerful financial force on earth: Compounding."

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Rational, profit seeking businesses refuse to lose money any longer than they have to. When an event occurs before the headlines are printed, the business is acting to protect investors' capital and position for recovery. Every employee, every manager, every executive and every board member are there to protect and grow investors' capital.

Do you think money takes up more life space than it should? On this show, we discuss with and share stories from artists, authors, entrepreneurs and advisors about how they mindfully minimize the time and energy spent thinking about money. Join your host, jonathan Dio, and learn how to put money in its place and get more out of life.

Welcome back to Mindful Money. Today we're going to get into part six of our versus the Gathering Darkness program, which is the step-by-step case for owning publicly traded shares in the great companies of the United States and the world. If you're just tuning in, six weeks ago I said two things. This is how we started First, that wealth is created by owning businesses and second, the reasons most people don't own, or don't own enough great businesses can be summarized as the Gathering Darkness. Five weeks ago, we talked about the psychological difference between using words like equities or the stock market instead of words like great businesses. Four weeks ago, we discussed the benefit of investors of an adult memory. Three weeks ago, we discussed my favorite characteristic of rational, profit-seeking businesses their absolute refusal to lose money for any longer than necessary. Two weeks ago, I described the second of these unique characteristics of great businesses, which is the business application of innovation. And then last week, we talked at length about equity dividends as the greatest possible source for growth of income, or why retirement income investors should love owning shares of the great companies of the US and the world.

This week I want to go over the summary objection that I always get when I tell people they need to own more shares of the great businesses of the US and the world, which is, by the way, the single most powerful thing a financial advisor or coach can do for you. As I considered everything presented over the last six weeks, realizing how powerful the ground we've covered has been, I decided that there's going to be two remaining issues that needed to be addressed. So next week I want to focus. I want to explore what Warren Buffett meant when he said my life has been a product of compound interest. I'm going to play the tape from beginning to end and I'm going to describe the results, not just in terms of income, of adhering to our belief in the ownership of great companies of the US and the world for decades, for an individual couple's lifetime, and probably in the biggest picture, what it means in the context of long-term inheritable family wealth and philanthropy. But that'll be next week.

This week I want to highlight the standard objection. It isn't enough just to state, as we have, the truisms that support the idea of committing to equity ownership as the dominant variable in our long-term investing success. One also must prepare oneself for the inevitable objections that are going to appear in our own minds. All of these objections all the ones I've heard to buying or holding onto shares of the great businesses of the US and the world, are different ways of saying the same thing. There are many, many species of objections, but only one genus. This is what I'm referring to as the summary objection.

No one can overcome the arguments behind all the many species objections. There are too many and they require too much data to refute. If I had to refute every single individual species objection, I would have to be an expert in everything. This is why we so often succumb to the particulars of the objections in today's version of the gathering darkness. We don't have the expertise to answer them ourselves and we are fatigued by relentless objections, especially those that coalesce into today's version of the gathering darkness, which always overwhelms our collective psyche. But if you believe what I've presented in versus the gathering darkness as true, then you have the summary objection slayer in hand and you don't need to overcome each species objection. All you must do is recognize that each of the many and varied species of objections is part of the same summary objection. That objection is this time is different. Every objection I have ever heard.

Owning equities right now is one of the many species of this objection. Since I was born, there have been hundreds, probably thousands, of professed reasons not to invest in. The great companies of the US, and the world More commonly are often pejoratively referred to as stocks reckles. I just want to give you a short sampling of those historical objections that remain in headlines for more than a single news cycle. This is by no means an exhaustive list, but it's still pretty long, so buckle up.

So first, the invasion of Cambodia and the broadening of the Vietnam conflict, the ending of Bretton Woods Agreement, which is the gold standard, the presidential resignation of Nixon, three Mile Island, the nuclear accident, the Soviet invasion of Afghanistan, the federal government firing all the air traffic controllers to overcome the strike that was Reagan, the Latin American debt crisis, black Monday, the Iran-Contra affair, the Iraqi invasion of Kuwait when America got into the war in the Middle East the first time, with the dot-com implosion, the 9-11 terrorist attacks when the US invaded Iraq with the Lehman Brothers bankruptcy, or the Great Recession, or even when Obama was elected president, and then, shortly thereafter, h1n1 was declared a global pandemic, and then Ukraine, the Crimea episode occurred, and then Trump was elected president, and then we had COVID-19. This we're getting into more recent memory now, and then Russia invaded Ukraine from a different angle. And then we had trillions I mean many trillions spent to avoid economic collapse and then ultimately reboot the economy, which led to supply chain disruptions, which led to some inflation and the fastest Fed increase in history, from zero to almost 5% in just under a year. Then we had Silicon Valley bank collapse, and we could always pick your global warming story at any point in the last 20 years, et cetera, et cetera, et cetera. It goes on and on.

Each of these headline chunks. You know it was a series of headlines surrounding the same issue. Each of these headlines was vastly different in their details, required very different responses and was attended by an echoing catastrophe of media headlines and news stories and interviews, and they all came to different resolution over different timelines. Amid each one of these episodes, you were given all the reasons why this particular episode was going to bring an end to the marketing economy as we knew it. They all claim the summary objection. This time is different. Right now, today, in the headlines, you can open up your Yahoo Newsfinder, you can pick your publication or your newspaper and you can find a lot of headlines all competing for top reason not to own equies. Even if it's not in the headline itself, it's still kind of implied. And if it's not even implied by the article, your own head will read it this way.

Here's a few. The globalization that has been enforced for the last 30 years appears to be in retreat. China and Russia, both in severe demographic decline, are becoming more isolated and authoritarian, when the expectation was just the reverse five years ago. Unchecked global warming is expressing itself through ever-worsening climate disasters, fires, storms and hurricanes, etc. The Middle East has once again degenerated into a genocidal conflict. Federal debt and deficit are at unsustainable levels and unrestraintedly increasing, at the same time threatening all areas of government spending, at a time when Medicare and Social Security are both on paths to insolvency. There's a hyper-divided Congress which has sort of expressed demonstrated total fiscal incompetence. Inflation actually still remains stubbornly high, even after the sharpest rate increase in the 110-year history of the Federal Reserve. There is a seeming near certainty of a pending recession, whether it presents itself as hard landing or soft. And we're approaching a presidential election amidst the most extreme political divisiveness in my living memory.

And you can probably name three or a dozen more headlines that are causing you to lose sleep at night. Each of these headlines can and will have an impact on companies and economies. They differ in their details. They demand different actions for resolution. They will lead to unknowable levels of market volatility and will ultimately be resolved on an indecipherable timeline. They're all reasons to be wary of your equity ownership. They all claim this time is different. This is always the case with headlines. If the headlines are good, you'll notice the ominous music and then they are too good, and if they're bad, then they're really bad.

Ever the darkness gathers. There are always many reasons being offered as to why. Maybe right now, just for this moment, we should perhaps reduce or eliminate our equity exposure and wait for an all clear signal before we rebuy our shares in the great companies of the US and the world. So I want to recall our five meta reasons, fully described and explained over the last six weeks, for owning shares in the great companies of the US and the world. They are the darkness is always ephemeral and adult memory tells us that each episode of the gathering darkness, as horrible as it is or as it appears in the headlines of the day, resolves upwards and is forgotten as the new darkness gathers. When there isn't a new darkness media will invent one Words matter.

Each stock in a stock market represents a rational profit seeking business. Owning great businesses is not emotionally the same as owning the stock market, even if the way we own great businesses is by owning shares of a stock market index. Every rational profit seeking business does two things we can't imagine the stock market doing. First, rational profit seeking businesses refuse to lose money any longer than they have to. When an event occurs before the headlines are printed, the business is acting to protect investors, capital and position for recovery. Every employee, every manager, every executive and every board member are there to protect and grow investors capital. We're investors. Second, rational profit seeking businesses engage human ingenuity and its expression through innovation. The exponential growth of human knowledge shows up powerfully in the growth of the great companies of the US and the world. Finally, as we discussed at length last week, the results of protecting capital and innovation that's number three and four above is that the dividend income created by the great companies of the US and the world multiplies at something like twice the rate of inflation.

None of these reasons for my devotion to owning shares of the great companies of the US and the world relies on a specific economic setting or market outlook. These are foundation beliefs. Not a single one of the preceding headlines diminishes these five beliefs in the slightest. The understanding, the invitation is to know that no headline ever can. I hold these five truths wholeheartedly and always. There is never a time when these things are not in operation, and believing them as I do means I can take all the regular and expected objections to the contrary of these five things with a grain of salt. If you hold these beliefs seriously, you don't have to know anything about the current state of markets or economies either, and you don't ever have to concern yourself from an investment perspective with headlines. They know the only way they can convince you to act differently, to click on what they want you to click on, to subscribe to the program that they're selling or to tune in next week to the next round of drivel, is to convince you this time is different. They will always try to convince you this time is different.

The five beliefs which I hope you're going to save and revisit are truths about how the world economies and markets work. They are factual, they are foundational, they're based on evidence. This time is different is always an attempt to separate you from that history and evidence. It is to imply that what is happening right now, whatever it, is so bad, so unique and so unprecedented that everything we have learned before, all of the history that's come before us, is worthless to this analysis. By saying this time is different, they're suggesting that all the history you know, or at least that is available to your knowledge, is meaningless and there's no more value left in the lessons you have learned. They want to tell you that you had better do something different this time or you will suffer terrible consequences. I want you to understand that. They've said this before many times. Every time they say it, they have many listeners who will dutifully repeat and echo what they hear. It doesn't make them right.

Believing in the five, or having access to someone who believes, enables you to remain unconvinced of the dire tones of the objection, while everyone around you becomes disconnected from our shared history and proceeds to lose their mind, if not every year, then at least every few years. Believing the five, you believe in something more powerful, more true, more real, more enduring than headlines, and you cannot be scared out of your genuinely well-asset allocated and broadly diversified portfolios of the great companies of the US and the world. Not being scared out means never having to decide when to re-enter and it means never interrupting the most powerful financial force on earth Compounding. Charlie Munger, at once Warren Buffett's best friend and one of the wisest financial sages in history, said the first rule of compounding is never interrupt it unnecessarily. That is what we're about. That's it. That's everything. A lifetime of compounding overwhelms all the headlines and objections. Never interrupt compounding unnecessarily. Full stop Headlines.

The popular objections to owning equities are always and everywhere compounding interruption machines, but they can't work in a vacuum. For the compounding interruption to occur, we must act. We got to do something. We have to sell. This is why permanent loss is always a human accomplishment. Markets zig and zag unpredictably all the time. It's how they're built, it's what they do. They cannot be predicted, they cannot be timed. It is our reactions to the headlines and or the scariness of the zigs and zags that creates losses. If you don't react, you can't lose. If you follow the plan, stay invested, stay properly asset allocated, stay broadly and globally diversified and rebalance, you will not lose.

The only tool I trust to build a rising income stream for myself and my family and transfer wealth across generations of time and, importantly, declining currency value is ownership of the great companies of the US and the world.

No other investable tool combines the motivation to protect investors' capital our capital with the power of human ingenuity and accelerating innovation. All specific objections to this belief are reducible to our summary objection it's different this time. After many instances of the gathering darkness pass into history and thousands of claims of it's different this time turn out to be false, you have to realize whatever the catastrophe or whatever the headlines are suggesting today, this too shall pass. Thank you actually for coming along on this ride with me. I hope your own conviction in owning the great shares of the US and the world is increasing and, if it is ever in doubt, I hope you can come back to these episodes and bolster your own beliefs. It is your beliefs that will save you when the headlines hit hard Next week. As I said at the outset, I want to talk about the lifetime implications of maintaining our conviction for owning the shares of great companies of the US and the world. For now, thanks for joining us and I'll see you next week.

We'll be sure to read those out on future episodes.