No one is more seduced by instant gratification than I am. Perhaps, that is why I love the stock market. Each day I receive a report card. That said, after thirty something years of investing in and observing the market, I also understand and appreciate the necessity of the passage of time for the growth of my investments.
If investors keep in mind that over the long term (and by that I mean since the early 20th century) the stock market has returned between eight to nine percent per year– including every bear market–then we stand a better chance of maintaining perspective.
Often at exactly the moment we should be committing capital to the stock market, the bad news is overwhelming. We want to sit on the sidelines until things settle down. BUT, if we can adjust our focus to the long-term–say ten to twenty years–then we will have the courage to step up and buy high-quality stocks when they are cheap.
I outline this proven strategy in great detail in my upcoming book, THE INTELLIGENT WOMAN’S GUIDE TO STOCK INVESTING.
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