Why do I say that? Because people often think of the stock market as a roller coaster. It goes up for a while, but then goes down, eventually ending up at the same place where it began, and then the cycle starts over. The implication is that one must catch the up-cycle to make … [Read more...] about Stock investing is not a zero-sum game
LongTermInvesting
Don’t fall for steady returns
Why everyone and their grandmothers don’t get rich investing in the stock market? It sounds straightforward enough to invest. All one has to do is buy an appropriate market index fund (or ETF) and hold it for ten or twenty years (the well-known buy-and-hold strategy). If you … [Read more...] about Don’t fall for steady returns
Let smart people work for you!
The best thing about long-term oriented stock investing is that it doesn’t require lot of work by us, the investors. Instead, we loan our money to people running actual businesses – and they work for us. We own shares in these public companies – so when they make money, we make … [Read more...] about Let smart people work for you!
Yes stocks are volatile
… but only in the short run. As we saw in this previous post, stocks go down 10% or more every year. More often than not, they also recover quickly. So what return could we expect in a given year? Here is a good chart from J.P. Morgan. It shows the range of annual returns that … [Read more...] about Yes stocks are volatile
I use cash as dry powder
Long-term investors face inevitable bear markets. Stocks may go down 20%, 30%, or occasionally even 40% - 50% before recovering. Bear markets last from six months to two years but it takes longer for stocks to recover to their previous peak prices. As an investor, I have gone … [Read more...] about I use cash as dry powder