“Virtually all investing mistakes are rooted in people looking at long-term market returns and saying, ‘That’s nice, but can I have it all faster?’”

– Morgan Housel

One of the most important aspects to investing is time. If you are investing with a short time horizon, the odds of having a positive return decrease. Below is one of my favorite charts demonstrating that point:

On any given day in the stock market your odds of a positive return are 53%, little better than a coin flip. If you increase that holding period to a year your odds increase to 75%. With a 5-year holding period you have an 88% chance of a positive return, and with a 20-year holding period there has been a negative return for U.S. stocks.

If you’re investing in the stock market, the longer your time horizon the better.


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Source: Compound Advisors
The information, analysis, and opinions expressed herein are for general and educational purposes only. Nothing contained in this commentary is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The material has been gathered from sources believed to be reliable, however Think Different Financial Planning cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice.