Because we are long-term investors, we will frequently face market downturns. To better prepare ourselves for these unpleasant but inevitable declines, it is good to study the history of the stock market declines. Looking at the US stock market, on average this is what we … [Read more...] about Beware, the markets go down often!
InvestorBehavior
Seeking instant wealth? Don’t!
Why so many people seek to double or triple their money in no time? First, it’s the thrill of doing it. And perhaps bragging about it to friends and family. Another reason could be that people don’t really understand the power of compounding. As we explored in an earlier post, … [Read more...] about Seeking instant wealth? Don’t!
Don’t be dismissive of low returns
When we invest, we dream of making it big and making it quick. We all have read overnight millionaire stories in the media. Doubling our money every year or even every two years is our ultimate goal. Getting a return of 10-20% each year sounds very pedestrian and unsatisfactory. … [Read more...] about Don’t be dismissive of low returns
Reinvesting is key
The magic of compounding only bears fruit if you reinvest all the earnings back into it. Let your money run as long as you can. If you take it out too soon – either to spend it or move it to cash – you won’t get the full benefit of compounding. This is best seen by an example … [Read more...] about Reinvesting is key