A Great Way to Start Investing

Public markets are one of humanity’s greatest innovations. I think we should celebrate them more.

Over the past 100 years, the S&P 500 has returned about 10% a year on average, which means investors have basically been able to double their money every seven years.¹ Let’s say you have a 42-year time horizon, from when you start investing to when you plan to retire. That’s six separate periods of seven years. A hypothetical dollar goes from one, to two, to four, to eight, to 16, to 32, to 64 over that time. And the actual investor experience over the past 42 years has been slightly better than 10%. Past performance is no guarantee of future performance, of course. But that’s the historical record.

My parents never invested in public markets. They thought of themselves as outsiders and suspected that Wall Street insiders would just take advantage of them. So my parents never got to experience the power of compounding. Today, anyone can have a good investing experience through public markets because it’s become so much easier to access low-cost, diversified funds.

Public markets are attractive because they’re more transparent than other forms of investing. You get to tap into the market’s collective wisdom, and everybody has access to the same information. You can trust in public markets, and historical returns bear that out. When you invest in a portfolio that includes many stocks from across the market, you’re not handing your money to someone who promises to make you rich in some mysterious way. You’re investing your savings sensibly and getting the market’s return. The market is an equal-opportunity enricher over the long term.

I grew up in Kansas, where if somebody walks up and tries to sell you a cow, you wonder why. What does the seller know about this cow that I don't? “Never look a gift horse in the mouth” applies to more than horses. The more opaque something is, the more you have to trust the person selling it. A market portfolio is the opposite of that. You don't have to trust anybody’s ability to pick stocks, because you’re not picking any. You’re buying the whole market. You can feel good about how you’re investing and focus on what’s most important in your life. How an investment manager chooses to capture the market can vary. Some approaches are better, some worse. But the decision to own it in the first place doesn’t ask you to trust anyone—it simply requires you to believe in the power of the market.

So what should an investor do? Just get started. Even a small investment can grow into something significant. And the sooner you start the better. Give yourself the chance to turn each $1 into $64.

The past century has included all kinds of crises, from wars to recessions to a global pandemic. Markets have persisted through it all. We have 100 years of good data on US markets that shows they behave the way we’d hope they would. This isn’t wishful thinking. It’s financial science.

Stay calm, stay invested, and let markets work for you.

David

Footnotes

1. Past performance is no guarantee of future results. In US dollars. Based on S&P 500 index annual returns, 1926–2025. S&P data © 2026 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. Growth of $1 is hypothetical and assumes reinvestment of income and no transaction costs or taxes. For illustrative purposes only and is not indicative of any investment.