Investing in the stock market can feel intimidating, especially for young investors who are likely to encounter a variety of barriers as they get started. A concern we hear about frequently is that stocks might lose value. The thinking goes that it must be better to avoid stocks or wait for a better time to invest, rather than focusing on the potential for gains.
A person that invests in the S&P 500 index for one month has a 63% probability of success (defined as earning a positive return). Longer windows improve the odds even more. By 10 years, the odds rise to 99% with a mean return of 116% (more than doubling your money).
This is a powerful reminder that longer time horizons are an investor’s friend. As the saying goes, “Time in the market beats market timing.” If you have idle cash (after setting aside cash for near-term expenses), we think you should start investing right away. Even better, set up recurring investments into your retirement account as a first step (any amount is better than nothing).”
Kovitz Investment Group Partners, LLC (“Kovitz”) is an investment adviser registered with the Securities and Exchange Commission. This report should only be considered as a tool in any investment decision and should not be used by itself to make investment decisions. Opinions expressed are only our current opinions or our opinions on the posting date. Any graphs, data, or information in this publication are considered reliably sourced, but no representation is made that it is accurate or complete and should not be relied upon as such. This information is subject to change without notice at any time, based on market and other conditions. Past performance is not indicative of future results, which may vary.
