Here’s a bold statement for you: no investor has ever lost money investing in the U.S. stock market over a twenty-year period. Let’s unpack that.
Putting your hard-earned cash into the market can feel like stepping onto a tightrope sometimes. But let me tell you, when we take a step back and look at the big picture, the story of the market’s performance over time is nothing short of fascinating.
So, let’s rewind the clock all the way back to the 19th century. Yeah, you heard me right, we’re going way back. From 1872 to 2018, the U.S. stock market has been through its fair share of ups and downs. But here’s the kicker: despite all the volatility, it’s managed to consistently deliver the goods over the long haul.
Now, I know what you’re thinking. “What about those dreaded stock market crashes?” Trust me, I hear you. Market corrections, crashes, you name it—they’re part of the game. But here’s where it gets interesting: the longer you stay in the game, the better your odds get.
Disclaimer: This is not financial advice and your are responsible for your own investment decisions. When investing capital is at risk.
Investing In The U.S Stock Market Over 5,10 and 20 Year Cycles
Let’s cut to the chase. Short-term investments? Risky business. But extend that timeline—five, ten, twenty years—and suddenly, the odds are in your favour. In fact, over twenty-year periods, the market has never failed to deliver positive returns.
Sure, there’s been rough patches, like the crash of 2008. But in the grand scheme, those downturns are outnumbered by the good times. With over a century of data on our side, it’s clear: playing the long game pays off. On the other hand, attempting to time the market is the fastest way to axe your returns by as much as 93%.
So here’s the takeaway: patience is key. Forget timing the market—it’s all about time in the market. And with time on your side, those stock market gains start looking pretty sweet.
Now, I’m not saying it’s all smooth sailing. Over 146 years of data, there’s been about a 31% chance of seeing negative returns in any given year. But here’s the kicker: when the market does take a hit, it’s often a wild one. Just look at 2008—talk about a rough patch.
But here’s the thing: those down years are outnumbered by the good ones. And when you’re playing the long game, that’s what really matters. Past performance might not be a crystal ball into the future, but when you’ve got over a century of data backing you up, it’s hard not to feel a little more confident.
So here’s the bottom line: if you’ve got the patience to ride out the waves and keep your eyes on the horizon, the stock market can be one heck of a ride. Just remember, it’s not about timing the market—it’s about time in the market.
And when you’ve got time on your side, those odds of making a dollar (or pound)? They start looking pretty good!
Read next: Defying the Odds: My Journey into Individual Stock Investing
Read Next: Investors Should Look To The Economy Of India For Growth
How To Get Started With Investing In The Stock Market
It’s hard to know what the best investments for your future are and it can seem overwhelming to make an informed decision. Here are some useful tools & guides to help you get started:
- 8 Index Funds that make my shortlist. Capital at risk.
Download my favourite investment app. Lightyear App can also earn you to 4.50% interest earned on uninvested cash. Capital at risk.
Selecting a portfolio that is right for you is key check out5 balanced fundsor5 defensive funds.
Check out myFinancial Freedom Calculator(Microsoft Excel)
Download my Financial Independence Planner(Google Docs)
