This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Keynes' Way to Wealth: Timeless Principles for Retirement Investors

Keynes the Stellar Investor

Unlike many investors who buy high and sell low, Keynes learned from his mistakes and three separate events that triggered near financial ruin. He was able to move on, reach new conclusions about how to regard market movements and earn a place in the pantheon of great investors that includes Benjamin Graham, Warren Buffett and George Soros.

In addition to eventually crafting ideas and institutions that would rescue Western economies (and Japan) after two devastating cataclysms, he managed money for his own portfolio, his Bloomsbury friends and several institutions. Keynes was most likely one of the first hedge fund managers and established some time-honored principles that the best investors follow today.

Keynes's performance under fire during the 1930s and World War II (his street in London was bombed), inspired several generations of investors that followed. His dogged pursuit of value stocks, dividends, cash flow and future earnings established him as a durable "buy and hold" investor who was confident he would be rewarded in the long run.

After his death, the vindication of Keynes' portfolios proved that he deserved to be emulated. Although his estate was worth at least $22 million (in 2013 dollars) when he died, his contribution to the arts, modern economics and a more stable global economic climate is incalculable.


As an investor, he championed the merit of examining the "earning power" of stocks, looking deep into a business's ability to survive in a variety of economic conditions and the abandonment of market timing and speculation.

The larger message from Keynes's investment style is that if he saw value in a company, he ignored the short-term "noise" of the market and held onto a company he saw as a worthwhile enterprise. He was always looking ahead and didn't particularly like selling a stock. And if a stock paid dividends, that was icing on the cake.

Today, when retirement investors are starved for yield, finding dividend-paying stocks that raise their quarterly payments on a regular basis, makes eminent sense. You can actually build a growth-and-income portfolio around them.

Even more significant is his recognition of "animal spirits" and the role that mass psychology plays in investing and markets. In doing so, he tackled one of the most elusive -- and powerful -- elements of markets, behavior that modern economists have still yet to fully understand, much less predict.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

John F. Wasik is the award-winning author of 14 books, a speaker, journalist and blogger. He writes a weekly investment column for Reuters, the world's largest news service, and contributes to The New York Times, Forbes and other publications. He lives in Grayslake, Ill., and has spoken to investment club conferences across the country.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $118.22 -0.56%
FB $105.58 -0.15%
GOOG $750.63 0.31%
TSLA $229.20 5.00%
YHOO $33.30 1.00%


Chart of I:DJI
DOW 17,843.19 +31.00 0.17%
S&P 500 2,091.36 +2.22 0.11%
NASDAQ 5,120.5680 +17.76 0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs