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

Fed Chair Janet Yellen confirms with her successor Jerome Powell the final interest rate hike in December 2017.

Joseph Corr

2017-12-14 12:41:00 Thursday ET

Fed Chair Janet Yellen confirms with her successor Jerome Powell the final interest rate hike in December 2017.

Federal Reserve raises the interest rate by 25 basis points to the target range of 1.25% to 1.5% as FOMC members revise up their GDP estimate from 2% to 2.5

+See More

Berkeley professor and economist Barry Eichengreen reconciles the nominal and real interest rates to argue in favor of greater fiscal deficits.

Joseph Corr

2019-05-23 10:33:00 Thursday ET

Berkeley professor and economist Barry Eichengreen reconciles the nominal and real interest rates to argue in favor of greater fiscal deficits.

Berkeley professor and economist Barry Eichengreen reconciles the nominal and real interest rates to argue in favor of greater fiscal deficits. French econo

+See More

The Trump team blocks Broadcom's bid for Qualcomm due to national security concerns and 5G telecom network issues.

James Campbell

2018-03-06 11:35:00 Tuesday ET

The Trump team blocks Broadcom's bid for Qualcomm due to national security concerns and 5G telecom network issues.

The Trump team blocks Broadcom's bid for Qualcomm due to national economic security concerns and 5G telecom network issues. Broadcom makes microchips fo

+See More

Most artificial intelligence applications cannot figure out the intricate nuances of natural language and facial recognition.

Fiona Sydney

2019-09-01 10:31:00 Sunday ET

Most artificial intelligence applications cannot figure out the intricate nuances of natural language and facial recognition.

Most artificial intelligence applications cannot figure out the intricate nuances of natural language and facial recognition. These intricate nuances repres

+See More

U.S. economic inequality increases to pre-Great-Depression levels.

Fiona Sydney

2019-02-17 14:40:00 Sunday ET

U.S. economic inequality increases to pre-Great-Depression levels.

U.S. economic inequality increases to pre-Great-Depression levels. U.C. Berkeley economics professor Gabriel Zucman empirically finds that the top 0.1% rich

+See More

Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits.

Rose Prince

2019-12-25 19:46:00 Wednesday ET

Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits.

Former White House chief economic advisor Nouriel Roubini discusses the major limits of central-bank-driven fiscal deficits. The International Monetary Fund

+See More