Market forecasters predicted that the past few years were going to be a catastrophe, and they were wrong. If you had listened to the doom-and-gloom forecasters at the beginning of the COVID pandemic, you would have promptly pulled your money from the stock market in the spring of 2020. And that would have been a huge mistake.

The market bounced back in a big way and enjoyed a strong bull run through the latter half of 2020 and into 2021 and 2022. Today, the market is still in a relatively good position, while unemployment remains low, and income inequality is not nearly as bad as journalists would have you believe (read the book The Myth of American Inequality, if you want to learn more).

Long-term investors understand that markets differ from day to day, but are part of a larger, more logical pattern. They aren’t caught up in fear-mongering and don’t panic when they hear a piece of bad news (which happens often! Read my recent article on negative journalism for more).

The Benefits of Long-Term Investing

Long-term investing means looking at the bigger picture and taking the long view rather than trying to time the market. Long-term investors are more likely to find success because the stock market is unpredictable in the short term and impossible to accurately predict. The only certainty is that, over the long-term, stocks tend to go up (there are many decades of data to back this up!).

Making Wise Investments

When investing long-term, it’s important to diversify your investments and invest in a variety of stocks, bonds, and cash funds. This blend will vary based on your age, circumstances, net worth, etc. (consult a financial advisor to find a plan that fits your needs). As a long-term investor, you also need to ignore the daily swings of the markets. Keeping an eagle-eye on the market will only cause you to panic! Better to delete any market-tracking apps from your phone and only check in now and then.

Consulting a Financial Advisor

It’s essential to consult a financial advisor who has a long-term view. A trustworthy advisor can help you to stay the course, plan for the future, and make smart investments. They will also be able to help you prepare for retirement, college savings for your kids, and any other long-term goals you may have.

 

The stock market’s ups and downs are part of the larger picture, and ignoring the near-term volatility is part of being a successful long-term investor. It pays to stay in the game and use the power of compounding gains to your advantage. The important thing to remember is to never panic — no matter what the market does in the short term, long-term investors are well-positioned to weather any storm.

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