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Patience pays off: At the core of Jeremy’s best-selling book, Stocks for the Long Run, is the belief that in the realm of market investing, you should think in terms of decades (reference the graphics in this article). As blogger Ben Carlson states here, “history tells us the longer you invest in the stock market, the greater your odds of success when it comes to beating safer assets.” Some interesting statistics to support that include an analysis of market activity from 1928 to 2021. Over that period, cash beat the stock market only 30 out of the 94 years.
A long-haul investment strategy: Ultimately, it all draws back to your timeframe. Carlson states, “My general rule of thumb is I don’t invest money in the stock market that I will need in the next 4-5 years or less.” But when it comes to one, two and three-plus decades down the road? Returns enter positive territory while losses narrow.
My two cents: You have to define what “long-term investing” means to you. From my perspective, it seems clear that investing in equities should be for those that have 20 or more years before they need the money to deliver the best possible odds of success.