Why Now Isn't The Time To Sell Your Growth Stocks

Charlie Munger once wrote, “The first rule of compounding is to never interrupt it unnecessarily.” The stock market has been begging you to reconsider lately.

Staying bullish on growth stocks has been the right trade for a decade, but with interest rates, Tariffs, and inflation uncertainties, is it still the right trade?

To understand where things are going, it’s important to remember where we’ve been. Consider the products and services that didn’t exist 25 years ago:

  • iPhone

  • Amazon Prime

  • Facebook

  • Youtube/Gmail/Google Maps/Chrome

  • Tesla

  • Netflix Streaming

  • AirBnB

  • Tik Tok

  • Snapchat

  • Twitter

  • Spotify

  • Linkedin

  • Pinterest

  • Open AI, Gemini, Claud

  • Nvidia H1N Processors

    And these that were born during the 2008-2009 Great Financial Crisis:

  • Uber

  • Venmo

  • Bitcoin

  • Square

  • Slack

  • Instagram

  • Whatsapp

Those companies represent roughly 7 Trillion in market cap today, and over a Trillion in annual revenue that simply didn’t exist in 2001. After the dot-com bubble, few people stayed invested in the NASDAQ long enough to profit from the magnitude of these companies’ growth.

So… What will the next 20 years bring?

Venture capital is on a mission to turn Sci-Fi into Sci Fact

Technology is like building blocks: Today’s innovation is tomorrow’s foundation. There would be no internet without computers. There would be no iPhone without the internet. There would be no Uber without iPhone. And so on.

Innovation is alive and well these days. Venture Capital firms have been more aggressive than ever in the innovation space. VC has been on a tear lately, producing several unicorns (billion-dollar private companies. 2021 broke records as $600 Billion was invested globally:

You don’t need to knock on Silicon Valley garages to find innovation either; the back rooms of the Fortune 500 are brimming with research and development. Current R&D from publicly listed companies totals in the multi-billions:

We don’t know what or when the next trillion-dollar company is coming along, but it’s foolish to assume it isn’t already being built.

If the next 20 years are anything like the past, we should expect more unexpected innovation. And that’s reason enough to hang on to growth stocks, (if not add more) when the market gets tough.

Joe Sweeney