Ramit Sethi suggests that it is important to invest in long-term gains instead of paying attention to daily dips and trends.

John Fourier

2018-10-30 10:41:00 Tue ET

Personal finance author Ramit Sethi suggests that it is important to invest in long-term gains instead of paying attention to daily dips and trends. It is futile to time the stock market. Wild and unpredictable fluctuations can confuse stock investors who miss informative fundamental factors from time to time.

Investors should play the long game by spending a sufficient amount of time in small-to-mid-cap profitable value stocks that exhibit conservative capital investment. This value investment strategy yields an 8% stock market return net of inflation on average.

If the investor stays in the U.S. stock market with his or her $10,000 investment during the 20-year sample period from 1998 to 2017, the long-run S&P 500 average return is 7.2%. However, if the investor misses the top 10 days of hefty stock market gains, he or she earns only 3.5%. 

For this reason, rational investors should aim to persist throughout transient stock market ebbs and flows for sustainable shareholder value maximization. Long-term stock market returns consistently conform to the normal distribution with fat tails or leptokurtic extreme outliers.  Insofar as the investor can persevere in his or her multi-year value investment strategy, this strategy helps reap reasonable rewards in due course.


 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Presidents Trump and Xi agree on an interim trade truce at the G20 summit in Argentina.

Apple Boston

2018-12-09 08:44:00 Sunday ET

Presidents Trump and Xi agree on an interim trade truce at the G20 summit in Argentina.

President Trump meets with Chinese President Xi again at the G20 summit in the city of Buenos Aires, Argentina, in late-November 2018. President Donald Trum

+See More

Better corporate governance through worldwide convergence toward Berle-Means stock ownership dispersion

Fiona Sydney

2023-12-05 09:25:00 Tuesday ET

Better corporate governance through worldwide convergence toward Berle-Means stock ownership dispersion

Better corporate ownership governance through worldwide convergence toward Berle-Means stock ownership dispersion   Abstract We design a model

+See More

Calomiris and Haber delve into the comparative analysis of bank crises and politics in America, Britain, Canada, Mexico, and Brazil.

Dan Rochefort

2023-04-14 13:32:00 Friday ET

Calomiris and Haber delve into the comparative analysis of bank crises and politics in America, Britain, Canada, Mexico, and Brazil.

Calomiris and Haber delve into the comparative analysis of bank crises and politics in America, Britain, Canada, Mexico, and Brazil. Charles Calomiris an

+See More

We can learn much from the frugal habits and lifestyles of several billionaires.

Joseph Corr

2016-10-01 00:00:00 Saturday ET

We can learn much from the frugal habits and lifestyles of several billionaires.

We can learn much from the frugal habits and lifestyles of several billionaires on earth. Warren Buffett, Chairman and CEO of Berkshire Hathaway, still l

+See More

President Trump supports a bipartisan bill or the Foreign Investment Risk Review Modernization Act.

Charlene Vos

2018-07-21 13:35:00 Saturday ET

President Trump supports a bipartisan bill or the Foreign Investment Risk Review Modernization Act.

President Trump supports a bipartisan bill or the Foreign Investment Risk Review Modernization Act (FIRRMA), which effectively broadens the jurisdiction of

+See More

The Trump administration expects to reach an interim partial trade deal with China.

Jacob Miramar

2019-11-05 07:41:00 Tuesday ET

The Trump administration expects to reach an interim partial trade deal with China.

The Trump administration expects to reach an interim partial trade deal with China. This interim partial trade deal represents the first phase of a comprehe

+See More