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

A physicist derives a mathematical formula for success.

Chanel Holden

2019-03-07 12:39:00 Thursday ET

A physicist derives a mathematical formula for success.

A physicist derives a mathematical formula that success equates the product of both personal quality and the potential value of a random idea. As a Northeas

+See More

Conservative Party wins the British parliamentary majority in the general election with hefty British pound appreciation.

Jonah Whanau

2020-01-08 08:25:00 Wednesday ET

Conservative Party wins the British parliamentary majority in the general election with hefty British pound appreciation.

Conservative Party wins the British parliamentary majority in the general election with hefty British pound appreciation. In response to this general electi

+See More

AYA Analytica podcast provides fresh insights into the latest stock market news, economic trends, and investment portfolio strategies.

Andy Yeh Alpha

2019-01-21 10:37:00 Monday ET

AYA Analytica podcast provides fresh insights into the latest stock market news, economic trends, and investment portfolio strategies.

Andy Yeh Alpha (AYA) AYA Analytica financial health memo (FHM) podcast channel on YouTube January 2019 In this podcast, we discuss several topical issues

+See More

U.S. and Chinese trade negotiators hold constructive phone talks after Presidents Trump and Xi exchange reconciliatory gestures at the G20 summit.

Joseph Corr

2019-08-04 08:26:00 Sunday ET

U.S. and Chinese trade negotiators hold constructive phone talks after Presidents Trump and Xi exchange reconciliatory gestures at the G20 summit.

U.S. and Chinese trade negotiators hold constructive phone talks after Presidents Trump and Xi exchange reconciliatory gestures at the G20 summit in Japan.

+See More

Government intervention remains a major influence over global trade, finance, and technology.

Amy Hamilton

2023-08-31 10:22:00 Thursday ET

Government intervention remains a major influence over global trade, finance, and technology.

Government intervention remains a major influence over global trade, finance, and technology. Nowadays, many governments tend to eschew common ownership

+See More

Mark Zuckerberg develops Facebook as a social network platform to help empower global connections among family and friends.

Amy Hamilton

2020-02-12 09:31:00 Wednesday ET

Mark Zuckerberg develops Facebook as a social network platform to help empower global connections among family and friends.

Mark Zuckerberg develops Facebook as a social network platform to help empower global connections among family and friends. David Kirkpatrick (2011) T

+See More