We all hear that stock market rewards those who stayed for the long-term! But how many investors stay put for 25-30 years?
The Theory says that if we invested some “X” amount 25 Years back, it would have grown to “XX” Crores of rupees today, but if we closely observe how many investors earn crores in the long run? Do you know the reason why?
The Reason Why Every Investor can’t stay for the long-term–
We are all Humans! We are controlled by emotions! Stock market is flexible; it drives on the socio-economic factors of the economy.
The two factors that decides investors portfolio is -“Fear and Greed”. When the market are in downturn, generally investors sell-ff their investments on fear of losing out their capital. When the markets are in uptrend, they invest more on fear of missing out(FOMO) Market rally! This is generally done in the markets.
But the wealth creation is a long journey, one has to sail ups and downs in the market. Market, by nature is volatile in nature. By frightening to the market crashes, you can’t create wealth. As an investor, you have to accept downfall also! Wealth creation happens in this down fall only!
According to One of the successful wealth creators,Warren Buffet- It’s time to”Be greedy when all are fearful and be fearful when all are Greedy”
Do check the market crashes statistics and compare the investment returns when you are “in the market” and “Out of the market” in the down turn. You can search on google and find amazing statistics on staying for the long term ignoring the market noise.
Generally, Media houses frightens investors when the market crashes and creates optimism when the market rallies! Both are natural, it is in the hands of the investors to sit tight and take decision.
Though the investor knows stock market rewards in the long-run, seeing the short-term volatility, investors tend to sell-off their investments. This the “Practical” Problem, why you can’t create wealth in the long-run.
Those who stay put in the down trend and up trend and hold for the long-term will definitely enjoy the fruits of investments. This is fact!
You can check the statistics of the past 25-30 Years and you would astonished by the returns the stock market gave! Do check on google; if you have any doubt and realise the importance of staying long-term ignoring the media noise!
Note- The above article is for informative purpose only. This can’t be taken as the purchase advice in the market.