Good Times in the Stock Market
You may see in the newspaper that the stock market is now in a big upheaval and investors are losing their shirts. Listen to the experts and you seem to be running away screaming and hiding your money in your mattress. However, I think it would be a mistake because it is now a great time to invest your money in the stock market.
For the average person, investing in stocks should be a long-term investment – at least five years. It should be your retirement investment, sending your child to college for 10-15 years or something like that. If you buy the stock you need money in 5 years I do not call it investment. I call it gambling.
If you have this long-term view and you often allocate money to invest in these purposes, you actually welcome these lower prices. Yes, lower prices! Look at this way. If you go to the supermarket to buy milk, you will be happy to buy your milk less than yesterday. When you drive to a gas station filled with gas in your car, you do not like more gas per gallon than you paid yesterday. Why do you think this is the opposite when you buy stocks? If you can sell and buy good stock at half the price, why do not you like it? Of course, the next few years the return may not be very good. But you can not predict when it will turn, and when it does so, the history shows that the stock price will go back above its previous price. Of course, the companies you invest in are not as good as the times when the economy performed better.
Their income and income have fallen. But the chances just last for a few years and then they return to normal and you have twice the stake you would have if you bought the same amount a few months ago. All the history of the stock market has shown this. We even brought it out of the depression of the 1930s. If you buy a stock and then stick with them, you will be rich today – and very old.
However, you should pay attention to two main challenges. One is if you now need the money and try to sell it at a reasonable price. This is very difficult. If you sold 6 months ago, you will receive less than you can get. But if you are in this case, it should be because you bought the stock more than five years ago. In this case, you may have made money even if the market falls as it is now. Another challenge is that you need to invest in a living company when the market turns. So you have to buy a stake in a quality company. If you do not know how to identify these stocks, I suggest you buy stocks in an index mutual fund. In this way, you only need to focus on the entire market, without having to worry about choosing stocks.