November 2025 NEBRASKA CATTLEMAN 23 over that period is still 8.29 percent!8 Cash has barely kept up with inflation (+0.55 percent annually in real terms within that same window), and bonds have returned about 4.8 percent annually in real terms. (Our forward outlook for maintaining purchasing power with bonds is less rosy.) Compare that to the sensible concern about permanent loss of capital caused by investing at the “wrong time” – say, by buying the S&P 500 when it looks expensive. Here, a long holding period is your friend. Despite short-term volatility, when purchased at the beginning of a given month and subsequently held for the 10 years to follow, an investor’s return when investing in the index has been positive 96 percent of the time since 1970.9 That number increases as the holding period grows. Meanwhile, inflation pushes on. For as long as we have had reliable Consumer Price Index (CPI) data, inflation has never been negative over a 10-year period.10 Nothing in investing is ever certain, but history shows that chances are good that, left uninvested, your money today will be worth less in a decade. One of the best ways to combat near-certain erosion of your purchasing power is to do something about it today. Consider This Putting it all together, while everyone’s circumstances differ, landowners would be well-served to manage for three major considerations when evaluating their plans for maintaining their families’ wealth for the long-term. First, liquidity is paramount. While accumulating assets on the sidelines as your cattle business produces cash can feel like an idle decision, adequate cash reserves and a secondary allocation to bonds provide income and could reduce exposure to dramatic swings in the equity markets and are a foundational base for the remainder of your balance sheet. More important, building a reserve of assets that can be readily accessed reduces the chance of adverse outcomes when the first generation is no longer around and heirs are responsible for paying taxes and keeping the family business running. Second, market timing risk and the chances of permanent loss of capital are often mitigated by taking a longer-term view. While no one can predict the future, history provides ample evidence that, even at the worst entry points, investors have been able to compound their wealth by staying invested for a long enough time. Third, and finally, inflation comes for us all. After shoring up adequate liquidity, equities can be your best weapon in the fight to maintain the value of your hard-earned dollars. With depressed crop prices putting downward pressure on Nebraska land values, and in today’s inflationary environment, expanding operations looks risky. Even a small allocation toward long-term holdings in the market can be a step in the right direction toward wealth preservation. Just like planting a tree, the best time to start investing for your future was 30 years ago. The second-best time is today. Small actions compound into tremendous impacts over time. With the right planning and outlook, today’s challenging environment for ranchers can turn into an opportunity all its own. ~NC~ About the Author: John Darwin is a vice president and relationship manager at Bridges Trust, a wealth management firm originally founded in Omaha in 1945 that serves clients across the state and nation with investment management, philanthropy, family office management, and trust and estate services. Editor’s Note: All opinions expressed are solely those of the author, provided for educational purposes only, and should not be construed as formal recommendations to transact in any security. Bridges Trust references the independent trust services offered by Bridges Trust Company (“BTC”), a Nebraska chartered trust company, Bridges Trust Company of South Dakota (“BTC-SD”), a South Dakota chartered trust company, and investment services offered by Bridges Investment Management (“BIM”), a registered investment adviser with the U.S. Securities Exchange Commission (“SEC”). Registration with the SEC does not imply a certain level of skill or training. Bridges Trust does not provide tax or legal advice. All investing involves risk. Past performance is no guarantee of future results. Footnotes: 1 Zephyr Informa Systems; 2 Morningstar Direct, author’s own calculations; 3 Jim Jansen, UNL: Nebraska Farm Real Estate Market Highlights 2024-2025; 4 Progressive Cattle; 5 U.S. Department of Agriculture, National Agricultural Statistics Service; 6 Development Counsellors International, “Nebraska’s Economic Review”; 7 Jansen, Market Highlights; 8 Aswath Damodaran, Historical Returns on Stocks, Bonds and Bills: 1928-2024; 9 Morningstar Direct, author’s own calculations; 10 St. Louis Fed, CPI for All Urban Consumers, 1947-2025. 0 50 100 150 200 250 300 350 1947-01-01 1950-05-01 1953-09-01 1957-01-01 1960-05-01 1963-09-01 1967-01-01 1970-05-01 1973-09-01 1977-01-01 1980-05-01 1983-09-01 1987-01-01 1990-05-01 1993-09-01 1997-01-01 2000-05-01 2003-09-01 2007-01-01 2010-05-01 2013-09-01 2017-01-01 2020-05-01 2023-09-01 Consumer Price Index, 1947 - 2025 Consumer Price Index for All Urban Consumers (seasonally adjusted). Source: Federal Reserve Economic Data, Federal Reserve Bank of St. Louis $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Jan-85 Jul-86 Jan-88 Jul-89 Jan-91 Jul-92 Jan-94 Jul-95 Jan-97 Jul-98 Jan-00 Jul-01 Jan-03 Jul-04 Jan-06 Jul-07 Jan-09 Jul-10 Jan-12 Jul-13 Jan-15 Jul-16 Jan-18 Jul-19 Jan-21 Jul-22 Jan-24 Jul-25 S&P 500 - Price (Jan. 1985 - Aug. 2025) Source: Factset. Past performance is no guarantee of future results.
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