One of My Favorite Investing Charts

Probably in my top 3 of all time favorite investment pieces is the one that is typically titled “Time in the Market, Not Market Timing is What Matters”.

This piece is absolutely devastating to the market timers out there who push the fraud that is “calling the market”.

No one can do this. At least not consistently enough that you can make bank on that person’s prescience. In fact, the surest way to lose money as an investor is to try to “beat the market” with market timing.

It can’t be done! Can you make a ton by speculating? Absolutely! Lottery winners get rich all the time. But that’s not investing. That’s gambling. And the house ALWAYS wins. (unless the math the house uses is lacking.)

In gambling, the house wins, there are are few winners but the vast majority lose. It’s really that simple. What makes a ‘winner”? Pure, dumb, luck. Nothing more, nothing less. No skill required.

How did George Soros get rich? By being right on his speculating. But he didn’t create wealth. He simply took wealth from others.

How does Warren Buffet get rich. By INVESTING in companies that make money. His companies earn their revenue by offering products and services consumers are willing to pay for, repeatedly. He is creating value for his consumers and is creating wealth for his employees and his investors.

A completely different engagement. Do not speculate with your retirement funds, folks. Invest! Investing though means being disciplined to understand that some times you’re going to get frightened. THe world is ALWAYS on FIRE somewhere.

But you HAVE to stay in. You have to! If you can’t, you are not an investor, you are a speculator. And speculators will get destroyed. Don’t let this by you.

If you can’t stomach the volatilty that is inherent to ALL Investments, just stay away. You are not a bad person for this. You are not a wimp. This just isn’t for you.

There is nothing wrong with going with CDs or government bonds. Just remember those are not investments. They are loans. Investing is when you’re putting capital at risk. There is no capital at risk in government bonds and CDs. Thus your returns will never overwhelm.

But you will at least rest easy knowing you;re getting something. And won’t lose principal. That’s not a bad thing, if the alternative is to sell when the market is getting knocked around.

Don’t do that!

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