The Ten Percent Solution

 

"I believe that the next twenty to thirty years will present some of the greatest opportunities ever. So much change. So many things happening. The only way to be a part of it all and to share in the successes is through ownership. Admittedly, our examples using fifteen percent are probably too optimistic. Certainly, that's more than most asset classes have averaged over even long time periods. However solid rates of return that easily outpace inflation are definitely within reach through ownership."

"So, should we buy common stocks?" I asked.

"No, with your ten percent savings, common stocks are not the way to go," Roy warned solemnly.

Needless to say, this caught me by surprise. "You've never owned a common stock?" I questioned.

"Never. I don't know anything about stock analysis, and I don't have any friends who do, either. It's a tough game. You have to be disciplined. To perform well, you have to buy when everyone else is selling and sell when everyone else is buying, a rare combination of guts and brains. You have to have a good background in investment analysis, and you have to use that background to look into the future. You not only have to see the various companies' management teams, you have to know what questions to ask them. Most of all, you have to have a sixth sense, an intuition, a knack of recognizing value. Very few people fill the bill. I certainly don't. I mean, think about it. Do you know anybody who's become rich buying and selling stocks? There aren't many. It's just too difficult."

"What about using stockbrokers? They must know what they're doing," I asserted.

"I was a stockbroker for several years, Dave," James Murray noted, "and I can assure you that, when it comes to