I couldn't see creating wealth by saving.
But I have created it by investing.
Investing? The markets will go up, they will go down, they will hold flat. But look at any long term chart and there is overall gain. Short term things can get ugly. Or magnificent.
I haven't done individual stocks in years. I can sort of say that "they wore me out" with the too much attention I gave them over time. Didn't need to, I just did. About 30 years ago I went to one managed mutual fund (Fidelity Contrafund) and a couple of "autopilot" index funds that covered the expanse of the market; small cap, mid cap, large cap and growth index funds.
I never went with international or emerging markets. Could have done well with some, but it wasn't an interest of mine.
In that time I've never waivered. I simply plugged money in with each paycheck. I didn't sell during any of the downturns. All I really did was once in a while, maybe once every 3 to 5 years, I'd rebalance my portfolio if it got out of whack. I kept Contrafund at about 40-50% of my holdings, the remainder was divided up between those others. If Contrafund ran way ahead of the others, I might shift some Contrafund money into the other funds.
I've been a lazy investor. But a diligent one.
I'm 64. I've only been investing for the last 30 years. But 30 years later (I just retired...TODAY) I'm still near 100% invested in domestic stocks. Something like 98.8%. I've played this as a long-term buy and hold investor, not as an "I'll outsmart the market by jumping in and out" investor. Not sure it I will but my recent projection has me supposedly living to be around 84. Another 20 years. That's long-term to me. So right now I have no intentions of moving out of stocks.
The ups and the downs? I held on through the 35% market plunges, through the large market crashes. With all that noise, the doom and the gloom? I stayed fully invested. Typically the next year the market not just fully recovered that loss, but jumped well above it. If you don't sell, you don't lose. You simply have a blip on paper. Sometimes and uncomfortable blip. But still, a blip. If you're a smart guy, or a lucky guy, and sell at the right time and buy back in at the right time, bravo, you win big. But if you're off by one market day with your timing? You can take a paper blip and turn it into a real loss. You lock in a loss, that can hurt.
I just looked this up. Contrafund (not trying to be a shill) has been around since 1967. Since it's inception...for the past 58 years...it has an average annual return of 13.15%, over the last 10 years, it's averaged 17.26%. Not bad.
FCNTX Contrafund
A 13% a year return for 30 years. Through th 2000 tech bubble bursting. Through the 2008 real estate and banking colapse. Through the pandemic. through all that a 13% return per year. I'd say "sign me up", but I already am.
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