Eras Come to an End

I’ll get to investing after this longer-than-usual introduction. I promise.

I became a Manchester United fan in the fall of 1998. I was eleven years old. My timing was impeccable. In 1999, they won the Treble, that’s the Premier League, FA Cup, and Champions League all in the same season. The second leg of their Champions League semi-final against Juventus remains one of the greatest sporting events I’ve ever watched.

What made me become a United fan? A Dutchman by the name of Jaap Stam. He was signed by United that spring, and while I was supporting the Netherlands in the 1998 World Cup, I couldn’t help but notice the big, hard-tackling defender with a funny name like Jaap Stam. I asked my dad what club he played for, and my dad said, “He’s the most expensive defender in the world. And he just signed for Manchester United.”

I decided then and there that I was a United supporter.

Life as a fan was good through elementary school, high school, university, and the early years of my career. United won the Premier League in 2000, 2001, 2003, 2007, 2008, 2009, 2011, and 2013, and they won the Champions League again in 2008 too.

It’s been rough since 2013, though. There have been a few trophies and final appearances here and there, but United just haven’t been good for a long time (terrible might be a better word). I’ll support them until I die, but it hasn’t been easy of late.

Since that 2013 title, Chelsea (twice), Liverpool (twice), Leicester City (once), and Manchester City (seven times) have won the Premier League. City, up until this season, have dominated. They even also won the Treble in 2023.

In 2024, when asked in a post-game interview who might be able to compete with the likes of Liverpool and Manchester City given their dominance over the last decade, then-United manager Erik ten Hag, another Dutchman, replied, “Eras come to an end.”

United’s era ended in 2013. Is Manchester City’s era over? God, I hope so. They had a rough year this year, but does it mark the end of their dominance? I have no idea. United’s era has been over for more than a decade.

So, when do eras end? How long do eras last? And do eras ever re-emerge?

I don’t know. But those are important questions when thinking about investing.

See, since the end of the Great Financial Crisis in 2009, the U.S. stock market in general, and U.S. tech in particular, has been on an incredible run. Since 2009, if you invested anytime the market has dropped 10 percent, or 20 percent, or even 34 percent, you were rewarded. And you were rewarded quickly.

“Buy the dip every single time” is the rallying cry of investors who started in the 2010s. It has been the era of “buy the dip.”

But eras come to an end.

In sports, there’s United, and now hopefully City. There’s the Chicago Bulls, the New England Patriots, the Dallas Cowboys, the Montreal Canadiens, the list goes on (I know, baseball fans, the Yankees apply here too).

In business, BlackBerry, Blockbuster Video, and IBM were once unstoppable.

In pop culture, stars come and go. Even Taylor Swift, probably (maybe?), won’t be the definitive pop star forever.

What I’m getting at is this: the era of being instantly rewarded for buying the dip in U.S. tech will come to an end. I don’t know when. It might even go on for another fifteen years. But it will end. Because all eras come to an end.

Investing in a basket of companies remains one of the wisest ways to achieve long-term wealth (link here). Just make sure you’re diversifying appropriately (link here). And the next time (or every time) the market takes it on the chin? Be prepared to wait a lot longer for the recovery than recent memory might suggest.*

Oh, and Manchester United will return to glory.

I hope.

*Someone who invested $1,000 in the S&P500 in August 2000 had to wait until April 2006 before it was worth more than $1,000. Then came the Great Financial Crisis.