Time in the Market
“Our capital markets are simply a relocation center; they relocate the wealth from the impatient to the patient.”
I had a conversation with a client who shared with me that a close friend of hers bailed out of the stock market. Why? Because he simply could not stomach what turned out to be the very short term decline of the market during the last few months of 2018. (As an aside, the U.S. market in 2019 has had its best start since 1987)
Study after study show that investors underperform their own investments. How can this be!? It happens simply because individuals let their emotions get the better of themselves. As I constantly repeat to the families I work with, 80% of one’s investment success is 100% due to the person who stares back at you from the bathroom mirror every morning! How could this not be when there has never been a twenty year period since 1872 when the U.S. market has had a negative return. For an interesting animated visual reflecting this fact, I encourage you to click the below link:
And always remember … its time in the market, not market timing, that is the key to long term investment success.