Connect with us


The Top Investment Quotes Every Investor Should Know



This infographic is available as a poster.

Investment Quotes

Investment Quotes

This infographic is available as a poster.

The Top Investment Quotes Every Investor Should Know

Quotes can have lasting impressions. They can also tell a story.

From Warren Buffett to John Maynard Keynes, the financial greats offer insights that often last for decades. Not only have they lived through several market cycles, their understanding of the market is foundational to their success.

In this infographic from New York Life Investments, we distill five timeless investment quotes and explore the data behind their insight.

Top 5 Investment Quotes for Investors

What investment quotes can we learn from today?

1. “The most important quality for an investor is temperament, not intellect.”

— Warren Buffett, CEO of Berkshire Hathaway

Often, emotions influence trading activity. Consider how investors traded 10x more in the first quarter of 2020 than in 2009.

Here are three fear indicators that can lead to these trading spikes:

  • Volatility: Higher Cboe Volatility Index (VIX) reading indicates higher fear.
  • Stock Price Strength: A greater number of stocks reaching 52-week lows versus 52-week highs indicates higher fear.
  • Bond vs. Stock Performance: When bonds outperform, it can indicate higher fear.

Yet, in spite of extreme investor fear, the S&P 500 has proven resilient. The index had positive performance in 32 of the last 42 years.

2. “The individual investor should act consistently as an investor and not as a speculator.”

— Benjamin Graham, author of The Intelligent Investor

Benjamin Graham, the father of value investing, had an enormous influence on Warren Buffett. One of his many core insights includes recognizing the difference between an investor and a speculator:

  • Investor: Focused on safety of principal and reasonable return.
  • Speculator: At risk of losing potentially the entire principal.

Rather than seeing an investment as simply a ticker symbol, Graham says, think of an investment like having a partial ownership in a business.

When investors think like an owner, they look for the intrinsic value of the company in the long term, which can compound in value over time.

TimeMonthly ContributionAnnual ReturnInterest Earned on Investments
Year 1$2007%$14
Year 11$2007%$231

In a relatively short period of time, the investor is earning $231 on a $200 monthly contribution.

3. “The biggest risk of all is not taking one.”

— Mellody Hobson, co-CEO of Ariel Investments

Mellody Hobson, co-CEO of Chicago-based Ariel Investments, became president at just 31. Today, Ariel manages over $18 billion in assets. As the head of two major firms (she is also chairwoman of Starbucks), Hobson understood the importance of taking the first step.

We show an example of a potential benefit of starting early:

InvestorContribution TimelineMonthly ContributionAnnual Rate of ReturnTotal Contribution AmountEnd Portfolio Value
Investor AAge 25-35$2007%$24,000~$300,000
Investor BAge 35-65$2007%$72,000$245,000

As the above table shows, Investor A contributed just $24,000, outperforming Investor B—who contributed 3x more ($72,000) over their lifetime. By age 65, Investor A’s portfolio value was worth nearly $300,000 while Investor B’s stood at $245,000.

Investing early is especially timely given today’s inflationary environment. Over time, inflation erodes the value of the dollar and, in turn, a person’s overall wealth.

4. “Time in the market beats timing the market.”

— Ken Fisher, founder of Fisher Investments

If an investor tried to time the market and missed the best performing days over the last century, they would have earned just a fraction of the total returns. Staying invested led to over 17,000% returns, yet missing the 10 best days over each decade led to returns of just 28%:

DecadeS&P 500 Price ReturnExcluding Best 10 Days Per Decade

Source: Bank of America, S&P 500 returns (Mar 2021)

Historically, the biggest drops in the market often happen just before the largest upswings, meaning that opportunities can be easily missed.

Even the top investors have trouble timing the market at every turn.

5. “It is better to be roughly right than precisely wrong.”

— John Maynard Keynes, father of modern macroeconomics

When markets are volatile, diversification can help investors temper its effects. Consider the following example that shows the advantages of diversification.

Annual Total Returns 1950-2020Large Cap EquityBonds50/50 Portfolio
1-Year Rolling Low-39%-8%-15%
1-Year Rolling High47%43%33%

Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management; Robert Shiller, Strategas/Ibbotson, US Federal Reserve (2021)

When investors blended stocks and bonds in their portfolios over a one year period, the downside was sharply reduced.

Annual Total Returns 1950-2020Large Cap EquityBonds50/50 Portfolio
5-Year Rolling Low-3%-2%1%
5-Year Rolling High28%23%21%

Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management; Robert Shiller, Strategas/Ibbotson, US Federal Reserve (2021)

Meanwhile, over the last seven decades, a combination of stocks and bonds has never produced a negative return across a five-year rolling period.

Learning from Historical Insight

The above five investment quotes can arm investors with investing lessons that often are easy to forget:

  • React logically, not emotionally
  • Leverage compound interest
  • Start early
  • Stay invested
  • Diversify

With insights drawn from those who have shaped the financial world, investors can better position their portfolios for success.

Advisor channel footer

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading


Visual Guide: The Three Types of Economic Indicators

From GDP to interest rates, this infographic shows key economic indicators for navigating the massive U.S. economy.



View the high resolution version of this infographic. Buy the poster.

A Visual Guide to Economic Indicators

Economic indicators provide insight on the state of financial markets.

Each type of indicator offers data and economic measurements, helping us better understand their relationship to the business cycle. As investors navigate the market environment, it’s important to differentiate between the three main types of indicators:

  • Leading
  • Coincident
  • Lagging

The above infographic from New York Life Investments shows a road map of indicators and what they can tell us about the economy.

What’s Ahead: Leading Indicators

Leading indicators present economic data that point to the future direction of the economy like a sign up ahead. Here are three examples.

1. Consumer Confidence Index

This key measure indicates consumer spending and saving plans. When the index is above 100, consumers may spend more over the next year. In December, the index jumped to 108 up from 101 in November. This was in part due to lower inflation expectations and improving job prospects.

In the December survey, 48% indicated that the job market remained strong, highlighting the strength of employment opportunities and likely influencing sentiment towards spending in the future.

2. ISM Purchasing Managers Index

The ISM Purchasing Managers Index indicates expectations of new orders, costs, employment, and U.S. economic activity in the manufacturing sector. The following table shows how the index is broken down based on select measures:

IndexNov 2022
Oct 2022Percentage
Point Change
Trend (Months)
Manufacturing PMI49.050.2-1.2Contracting1
New Orders47.249.2-2.0Contracting3
Manufacturing SectorContracting1

For instance, in November the index fell into its first month of contraction since May 2020. Falling new orders signal that demand has weakened while contracting employment figures indicate lower output across the sector.

3. S&P 500 Index

The S&P 500 Index indicates the economy’s direction since forward-looking performance is factored into prices. In this way, the S&P 500 Index can represent investor confidence as the index often serves as a proxy for U.S. equity markets. In 2022, returns for the index are roughly -20% year-to-date.

Current Conditions: Coincident Indicators

Coincident indicators reflect the current state of the economy, showing whether it is in a state of growth or contraction.

1. GDP

GDP indicates overall economic performance. Typically it serves as the most comprehensive gauge of the economy since it tracks output across all sectors. In the third quarter of 2022, real U.S. GDP increased 2.9% on an annual basis. That compares to 2.7% for the same period in 2021.

2. Personal Income

Rising incomes indicate a healthier economy and falling incomes signal slower growth. Personal income grew at record levels in 2021 to 7.4% annually amid a rapid economic expansion.

This year, U.S. personal income has grown at a slower pace, at 2.7% on an annual basis as of the third quarter.

3. Industrial Production Index

Strongly correlated to GDP, the industrial production index indicates manufacturing, utilities, and mining output. Below, we show trends in industrial production and how they correspond with GDP and personal income indicators.

DateU.S. GDPPersonal

*As of Q3 2022.

As the above table shows, factory production collapsed following the 2008 financial crisis, a key indicator for the depth of an economic downturn. Meanwhile, personal income sank over -3% while GDP fell -2%.

Despite economic uncertainty in 2022, industrial production remains positive, at a 4.7% growth rate, albeit somewhat slower than 2021 levels.

Rearview Mirror: Lagging Indicators

Like checking your back mirror, lagging indicators take place after a key economic event, often confirming what has taken place in the economy. Here are three key examples.

1. Interest Rates

Often, interest rates respond to changes in inflation. When rates rise it can slow economic growth and discourage borrowing. Rising interest rates typically signal a strong economy and are used to tame inflation. On the other hand, low interest rates promote economic growth.

Following years of record-low interest rates, the Federal Funds rate increased at the fastest rate in decades over 2022, jumping from 0.25% in March to 4.25% in December as inflation accelerated.

2. Consumer Price Index

This inflation measure can indicate cash flow for households. Inflation is often the result of rising input costs and increasing money supply across the economy.

Sometimes, inflation can reach a peak after an expansion has ended as rising demand in an economy has pushed up prices. In November, U.S. inflation reached 7.1% annually amid supply chain disruptions and price pressures across food prices, medical prices, and housing costs.

YearInflation Rate Annual Change

*As of November 2022.

3. Unemployment Rate

The unemployment rate has many spillover effects, impacting consumer spending and in turn retail sales and GDP. Historically, unemployment falls slowly after an economic recovery which is why it’s considered a lagging indicator. When the unemployment rate rises it confirms lagging economic performance.

Overall, 2022 has been characterized by a strong job market, with unemployment levels below historical averages, at 3.7% as of October.

On the Road

To get a more comprehensive picture of the economy, combining a number of indicators is more effective than isolating a few variables. With these tools, investors can gain more perspective on the cyclical nature of the business cycle while keeping a long-term perspective in mind on the road ahead.

Advisor channel footer

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading


Europe’s Energy Crisis and the Global Economy

Europe’s energy crisis could last well into 2023. Here’s how the energy shock is causing ripple effects across the broader economy.



This infographic is available as a poster.

Europe’s Energy Crisis and the Global Economy

Volatile energy prices are squeezing household costs and business productivity in Europe.

While energy prices have fallen in recent months, several factors could influence price volatility looking ahead:

  • Russia slashing energy supplies
  • Rising winter heating demand
  • Shrinking European storage facilities

In the above infographic from New York Life Investments, we show the potential impacts of Europe’s energy crisis on consumers, businesses, and the wider global economy.

1. Impact on Consumers

Energy plays a central role in overall inflation. Here’s how it factors into the consumption baskets of various countries:

CountryEnergy %
of Inflation
Total Inflation Rate
(Sep 2022)
EnergyFoodAll Items Less Food
and Energy
United Kingdom28%8.8%2.5%1.3%5.0%

Source: OECD (Oct 2022). Annual inflation is measured by the Consumer Price Index.

As the above table shows, energy makes up nearly half of consumer price inflation in Germany. In the U.S., it contributes to about one-fifth of overall inflation.

Amid energy supply disruptions, U.S. winter heating costs are projected to rise to the highest level in a decade. As heating costs rise, it could impact consumer spending on discretionary items across the economy, along with other essential household bills.

2. Impact on Business

Natural gas and petroleum are key components in many industries’ energy consumption. As a result, the recent rise in energy prices is adding significant cost pressures to operations.

Below, we show how four primary sectors use energy, by source:

U.S. SectorPetroleumNatural GasRenewablesCoalElectricity

Source: EIA (Apr 2022). Figures represent end-use sector energy consumption in 2021.

In Europe, soaring energy prices have led to production declines in energy-sensitive industries over recent months. As a ripple effect, European fertilizer production capacity has decreased as much as 70%, crude steel capacity has fallen 10%, and aluminum and zinc production capacity has sunk 50%.

In response, some companies may move production out of Europe to regions with lower energy prices. This occurred in 2010-2014 amid high European energy prices, where companies relocated to the U.S., the Middle East, and North Africa.

3. Impact on the Economy

While the energy crisis is having devastating effects on many countries, some markets like the U.S. are more sheltered from the impact. As seen in the table below, the U.S. produces virtually all of its natural gas. Figures are shown in trillion cubic feet.

YearU.S. Natural Gas
U.S. Natural Gas
Net Imports

Source: EIA (Sep 2022).

By contrast, Europe imports 80% of its natural gas, primarily from Russia, North Africa, and Norway. Not only that, natural gas imports have increased over the last decade, up from 65% of total supplies in 2010.

Meanwhile, the energy sector is seeing strong returns supported by higher oil and natural gas prices, along with key fuel shortages as Russia constricts supplies to Europe. In November the S&P 500 Energy Index was up 65% year-to-date compared to the broader index, with -17% returns.

Europe’s Energy Crisis: Looking Ahead

Given the complex geopolitical environment, Europe’s energy crisis could last well into 2023, driven by many factors:

  • Rising demand from China post-COVID-19 lockdowns
  • Lower European fuel reserves
  • Inadequate energy infrastructure in the medium-term

The good news is that European government relief has reached €674 billion ($690 billion) to cushion the effect on households and businesses.

However, this has additional challenges as increasing money supply may be an inflationary force.

Amid market volatility, investors can avoid getting caught up in short-term market movements and stay focused on their long-term strategic allocation.

Advisor channel footer

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.

Continue Reading


Are you a financial advisor?

Subscribe here to get every update, including when new charts or infographics go live:

Thank you!
Given email address is already subscribed, thank you!
Please provide a valid email address.
Please complete the CAPTCHA.
Oops. Something went wrong. Please try again later.