Category Archives: The Stock Market

Investing In The Stock Market For The Long Run

Investing In The Stock Market For The Long Run

My mum always told me “You need to invest in the stock market for the long run“. My mum loves the stock market. She has all her retirement money in the stock market and she makes a fair amount of money (around 25% per year over the last 3 years). She is always trying to give me advice about the stock market and I thought I would share her number one tip with you guys today. And that is this:

“When investing in the stock market be in it for the long run, a minimum of 5 years”

This is because the stock market is constantly fluctuating, going up and down. If you only invest in the stock market for 1 year then you could get a bad year an lose a lot of money. However, if you invest over 5 years or 10 years then the stock market always eventually goes up. It averages about 11% every year. However, this year it has gone backwards and lost people a lot of money.

The stock market is a great tool for a retirement plan, or for making some extra income on this side. Many people make money from the stock market as the full time income and you can do this too if you want, it just takes some training, some practice and a lot of determination. But the stock market is perfect for a long term investment such as retirement, or a college fund, or saving up for a house in the future.

Here are some tips about investing in the stock market for the long run.

Have a long term goal

Many people want to get rich quick. But few people ever do. Have a long term wealth goal that is achieveable. Have something you can diligently work towards and that you can achieve and be happy with. Don’t set something too high (like I often do), but set something achievable and attainable.

Be in it for the long run. Don’t just try to make $10,000 in your first month. Try and make $1,000,000 in 20 years. The longer you are in the stock market the more it works for you because you begin to earn interest on your interest. As you earn more interest you earn more money, when you stocks go up or you get some dividends then re-invest it back it. Watch your money grow and grow and grow until you are wealthy. But have a long term goal…not just a short term daydream.

Buy, buy, buy on a consistent basis

The stock market will go up and it will go down, but you need to invest on a consistent basis. If you invest money in the stock market every month, then even when the stock market drops it is not bad for you because you have an opportunity to buy at the low points and make money. If you just invest once, then maybe it might crash for a bit and you have to wait for it to go back up again. If you invest all the time then you get to experience the highs of when the stock market shoots up and you also get to take advantage of the lows and buy stock cheap and make more money.

Don’t have unrealistic expectations

I covered this a tiny bit in point #1, but don’t have unrealisitic expectations of the time it will take, the percentage you will get and the overall money you will make. Have a realisitic goal that you can diligently work towards, don’t just have a daydream about how you want to make $1,000,000 in 5 days from the stock market. Remember being in it for the long run is the key to success in the stock market.

Have realistic expectations so you won’t get disappointed and give up, if you have realistic expectations then you can celebrate your successes and be motivated to continue on your long term journey towards wealth.

So if you want to invest in the stock market, stop thinking just short term and invest in the stock market for a long period of time, at least 5 years.