Thread by @TihoBrkan

1/ Investing for the long run.

Like so many others, I've been waiting (hoping?) for the stock market to crash properly.

Now it has, and it could go lower. Who knows.

But why?

Because I've started a trust fund for my unborn kid(s).

2/ I'm going to keep it quite simple because a lot of my time is taken by working & managing our family office and specifically focusing on direct real estate and agricultural deals.

Therefore I just want something passive and something that stands a chance of doing well.

3/ Investment vehicle: Small-Cap Value

It isn't a secret that for a 100 years Small Cap Value has outperformed the broad market with a 13.6% CAGR.

This assumes a starting point just before the Great Depression (awful timing) & counts in the recent -45% drawdown, too.

4/ The returns can be far better if you start your investment journey following a massive crash, say a -40 to -50% drawdown.

Investment parameters?

I'm going to start with a decent lump sum. This should help a lot because it's very wise to back up a truck after a crash.

5/ However, what is more important, is my monthly contributions to this fund.

I'm also going to buy every single month (Small Cap Value index) with a meaningful amount & increase those contributions by 10% every single year.

I'm fortunate to have a very high saving rate (70%+).

6/ We discussed the return which could reach 15% if you buy after a crash however, past performance is no guarantee of future results.

Also discussed the lump sum & contributions, which will stay well above inflation (I happen to think inflation is north of 5% & maybe more).

7/ Finally, the time. I'm going to do this for about 30 years with the utmost discipline, every single month, without missing one single contribution.

If you ask me today, I think it's a perfect time to start investing.

However, ask me how I went in about 30 years time. 😂