Achieving Long-term Success
Lots of people think that in order to do well in the stock market, you have to do hours of research and make smart stock picks. In fact, people who try to pick stocks nearly always underperform the average. Our strategy is tried and true--tracking the average market return performs very well over time and will ensure sufficient returns for a healthy retirement.
Why follow the market?
The stock market can be difficult to navigate, and doing the research to pick stocks can be tiresome and may not even provide better results. Investing in the stock market as a whole outperforms most stock pickers so skip the hassle and do exactly that. Stocks and the market as a whole are prone to fluctuations (The graph to the left has lots of ups and downs). But investing in the market for the long term provides safe and strong returns (The line on the graph trends upwards over time).
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To invest in the stock market as a whole, you can buy index funds which allow you to buy lots of the stocks in top performing companies like Apple or Microsoft. By investing in lots of stocks, you avoid taking a serious hit if some of them do poorly. Investing in the stock market means investing in the broader economy. Over the long term, the broader economy will be continue to grow and be successful.
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This graph shows the performance of the New York Stock Exchange from 1965 to the present.
The Strategy
The strategy that will grow your investments passively for the long-term is simple:
Invest consistently and buy the S&P 500 Index fund
Invest Every Month
Set aside a portion of your income to invest every month or every paycheck so that you can build investments over time.
Buy the S&P 500
The S&P 500 tracks the 500 largest companies in the US. By buying this, you own a piece of all the top 500 companies.
Hold and Watch it Grow
Continue to keep investing, and in time, you will see substantial growth of your investments. Patience is key.