For long-term investing AKA investing for your retirement we always preach two things: diversification and time in the market. We want diversification cuz when never know when one market, say U.S. stocks, will do very well and when other areas will do very poorly. Having a diversified portfolio helps to smooth out the wildness that comes with concentrating our retirement money in one specific area instead of spreading it out. And, as is highlighted in the attached article, “The data shows that, while positive performance is never assured, investors’ odds improve over longer time horizons.”
Please give the attached article by DFA a read, it’s a very short one, too, but I’ve also pulled out this image which shows the frequency of experiencing positive returns in the S&P 500 – the more time we spent in the market, the greater chance we gave ourselves of having a positive return on our investment. This also supports why it is so important to start saving and investing early and to continue to do so. If you start early you could experience two or three of these 15-year periods.
