Value Investors Have No Choice but to Buy
For value investors, long-term index investing matters more than short-term volatility. Holding too much cash carries long-term risk.
【Value Investors Have No Choice but to Buy】CLEC Club
Written date: Jan 10, 2019
No matter how the market fluctuates, it will be profitable over the long term. Those who hold too much cash face high long-term risk.
From an investment-return perspective, long-term index investing has a positive return of 9.5%.
Cash, through long-term inflation, only becomes less valuable. This is a major risk.
Value investors ignore short-term volatility and small losses. They look far ahead to the value and growth of long-term investment in U.S. indexes. Only by entering the market do you have a chance to share in the profits of capital markets.
The world's wealth will only continue to grow, but if you do not invest or are too conservative, you cannot share in the profits of global economic growth. In the end, you fall onto the poor side of a widening wealth gap.
The sharp decline that began last October was rare in history, but it was not a bear market and not a bubble. It was only a correction.
It was like the rapid decline and volatility from the second half of 2015 to early 2016. The market's level of panic then was like today. But those who bravely bought or held steadily back then are the winners today. If we look back in 2021 the same way, the people who buy and hold bravely now will also be the investment winners in 2021.
For those who are just starting to put capital into the market, facing market volatility is difficult, but it is worth it. After several years of gains, the market will bring profit, and investing will become smooth, because the chance that the future market falls below your cost will become smaller and smaller. When your investment lets your assets take off, that is the road toward happiness and success in life.
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