You Might Not Invest Well, But Do It Anyway
Investing is hard. Don’t listen to what the financial experts will tell you, most of you probably won’t make much money as an investor. The reality is that by the time you hear of a good stock, you’re probably too late. And, if you choose to do the passive route, your return isn’t likely to be huge anyways when you factor in inflation since you’re essentially buying fully valued stocks continually.
You see the market can be exploited and you can do very well if you take a ton of time to invest and study various companies, but most of you won’t do that. Even if you’re buying quality dividend stocks that will grow over time, the market is somewhat efficient and these future cash flows are priced into your purchase price.
The key is to buy great companies when nobody wants them. They’re hard to find because frankly, there’s a reason they are depressed. Here’s a hint of a possible company in this category: Microsoft (MSFT).
So even if you’re return is only a few percentage points every year for the next couple decades, I still think you should invest. More than anything, you are proactively saving which most people don’t do. Maybe you’ll get lucky and get a few extra points of return on your money and at least make it worth you while. But, even if you don’t, you’re still saving money and putting it away to at least hopefully keep up with inflation.
Don’t try and hit a home run, because when you do, you’ll probably lose half your money. Instead, stick to your game plan, don’t worry if you can’t find the next Apple, and be satisfied with at least keeping your purchasing power. You’ll be fine down the road.