When it comes to investing, many people let their emotions take over and make impulsive decisions.
They jump in and out of the market based on the latest news, “expert” opinions or media articles, trying to avoid downturns and catch the next big wave. This behavior, driven by fear and greed, often leads to poor investment outcomes and significant financial losses.
Imagine you invested $10,000 in the stock market 30 years ago.
By the end of 2023, if you left your investment untouched, it would have grown to $181,763.
However, what if you missed some of the market’s best-performing days?
Missing just the 10 best-performing days in the stock market would have significantly reduced your investment to $83,272 or by 54%.
And missing the best 30 days would lower your returns by 83%!
The key takeaway is that staying invested for the long term is crucial. The stock market experiences ups and downs, sunny days and big storms, but trying to predict and time the best days to invest or withdraw money is extremely challenging and often leads to missed opportunities. Even missing just a few of the best-performing days can drastically reduce your returns.
When you remain invested, your money benefits from the compounding effect. Compounding is when your investment earns returns, and those returns generate even more returns. Over time, this can lead to significant growth in your investment.
Investing is not about perfection; it’s about staying committed. So, invest wisely, stay the course, and watch your money grow over time.
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