The key to success in the stock market? Go long, be boring.
The wisest wisdom says to invest/buy into the stock market for the longest possible term,
then stay in a little bit longer.
Why? ‘Cuz while individual stocks (i.e., companies) might crash/burn, the overall value of the stock market inevitably goes up.
Volatility = RISK
— the potential that the value of the $$$ invested today could change tomorrow —
For see, to wit:
if you / the so-very-smart, forward-thinking, prognosticative You / bought shares / invested $$$
in Microsoft, Apple, Amazon back in those early days,
the value of the $$$ invested then would be so much greater now than its value back then
Only problem? Nobody really knows which company is going to hit the $1T (yes, that is trillion) market value way back when a normal person (see: you) could actually afford it.
Fun factoid: the Elders attended a dinner party in the early ‘80’s and someone there told them cellphones were going to be a hot thing, offered to sell the Elders a piece in Samsung for an initial investment of $5K.
Yah, no. Sigh.
Anyhoo, investing is many things, but one thing it should never be is emotional.
Get RTF out of those feelings … remaining logical, reasonable, and rational is key to investment success.
Read the room, act accordingly. If everyone else is panicking, then time to calm RTF on down.
Understand what is really happening, never run with the crowd because the crowd is running.
Lemmings, anyone?
Investing — like Viagra — is about performance … not safety … and volatility is a key element.
Seek it, understand it, embrace it.
Understand, too, that:
Past performance + product reviews ≠ smart investing
Always always always remember: the market is selling a product,
be it stock of a particular company,
a mutual fund,
dreams of financial freedom,
or a secure retirement
… so healthy dose of skepticism mixed with diligent research is the best way to invest.
Avoid the snake oil, as it t’were.
In fact, the SEC requires all investment products (see what did there) to include this disclaimer:
“Past performance is no indication of future results.”
Take to heart. Keep in mind. Now go do.