Buy and hold – 50 years of stock market ups and downs amidst news and noise, crisis, war, and whatnot.

The case for buy-and-hold investing is illustrated in two infographics shown below. Digest the past fifty years of stock market ups and downs amidst news and noise, crisis, war, and whatnot. Then save and invest in the stock market. Hold for the long term. Here’s how $10,000 grew to $2.2 million.

 

Buy and Hold. 50 years of stock market ups and downs.

Link to “Stocks for the Long Run”

Of course, investors can and do lose money in the stock market. Remember that bull and bear markets are inevitable. Selling everything at a market trough is a serious mistake and a risk you’ll want to avoid.

Characteristics of Major Bear Markets and recoveries in US Stocks 1942 - 2022 for Buy and Hold Investors.

In conclusion, remember this…

The worst course an investor can take is to follow the prevailing sentiment about economic activity. The reason is that it will lead the investor to buy at high prices when times are good, and everyone is optimistic and sell at the low when the recession nears its trough and pessimism prevails. The lessons to investors are clear. Beating the stock market by analyzing real economic activity requires a degree of prescience that forecasters do not yet have. Turning points are rarely identified until several months after the peak or trough has been reached. By then, it is far too late to act in the market. —Professor Jeremey J. Seigel