ARBOR WEALTH: Namath, Bob Seger and a market flatline

Staff Writer
The Destin Log

“Ain’t it funny how the night moves … with autumn closin’ in.” from “Night Moves” as recorded by Bob Seger

Let’s talk 1965. Alabama quarterback Joe Namath signs a groundbreaking contract with the New York Jets for $427,000. President Johnson unveils his “Great Society” program during the State of the Union Address. “Hullabaloo” debuts on television. Winston Churchill dies. 

While The Beatles are filming “Help” in The Bahamas, Malcolm X is gunned down in New York’s Audubon Ballroom by Nation of Islam extremists. The president sends combat troops to Vietnam. Lucky Debonair wins the Kentucky Derby. Mickey Mantle hits the first indoor home run in the Astrodome. LBJ signs the Medicare Bill. Riots erupt in Watts and Chicago. Borman and Lovell orbit the earth for two weeks in Gemini 7. The French re-elect Charles de Gaulle.

Here in Florida, Keith Richards of the Rolling Stones rolls out of a Clearwater motel bed and plays and then tapes the first stirring guitar chords to “Satisfaction,” a song that dominates summer airwaves and eventually is named by Rolling Stone Magazine as the second greatest rock song of all time. “Billion Dollar Betsy” makes landfall in Key Largo in September, reaching 125 mph winds at Big Pine. The Disney brothers announce the official launch of the “Disney Project.”

What’s the connection to investing? Well, if your parents or grandparents retired in 1965, and were invested in a broad basket of securities representative of the S&P 500 index, they may recall some of the aforementioned occurrences. But mainly they’ll remember that late in 1965 the S&P 500 began a 17-year flatline. 

That’s right. From 1965-1982, for almost 17 years, the S&P 500 was completely flat. So if you retired in 1965, and invested in the index to help fund your retirement, you received zero returns. In fact, you lost ground, because you didn’t even keep up with inflation.

The market may “always come back,” as index proponents proclaim, but in what period of time? Ten years or 15? Some folks do not get to enjoy a retirement of that duration. The average American is retiring around age 66, and the average age at death is around 80. That’s a retirement span of 14 years. What good does it do the retiree who passes away at 80 if the S&P 500 is flat during his retirement and then gains ground after he dies?

Truthfully, it is our opinion that successful investing often comes down to what you buy and what you pay for it. Just throwing money into an index fund and waiting for “efficient markets” to do their work may or may not serve your retirement funding needs, as evidenced by the long period of zero returns that began in 1965. 

Margaret R. McDowell, ChFC, AIF, a syndicated economic columnist, is the founder of Arbor Wealth Management, LLC, (850-608-6121 —, a “fee-only” registered investment advisory firm located near Sandestin. This column should not be considered personalized investment advice and provides no assurance that any specific strategy or investment will be suitable or profitable for an investor.