Unless you hit the lottery and win millions of dollars, you should always have money invested in the stock market.
Even if you are retired, you should own stocks for the rest of your life.
Reason Number One: We Are Living Longer.
Better eating habits, drugs, and medical technology have resulted in our living longer.
In the 1940s, life expectancy for a man and a woman at the age of 65 was 77 and 79, respectively. Today, life expectancy has gone up considerably – to 84 for men and 86 for women.
You’re going to need a lot of money to ensure that you don’t outlive it! Investing in the stock market over time is the best way to assure that.
Reason Number Two: Stocks Make Money Long Term.
Over the last 100 years, stocks have made money if you bought and held them.
Sure, there are instances where that has not been the case. This is why we diversify, by owning at least 15 stocks at any given time in our portfolio.
But history has shown that stocks are more likely than not to go up. These statistics prove it:
- Stocks held for at least one year go up 73% of the time.
- Stocks held for five years go up 85% of the time.
- Stocks held for 10 years go up 95% of the time.
- Stocks held over 20 years go up 100% of the time.
I will be an investor and holder of stocks for the rest of my life.
You have to look beyond the age of 65. Many people do not look past that age when it comes to investing. Remember, hopefully you’re going to live to be much older than 65. So you will need that money to last you for many more years.
Reason Number 3: Stocks Beat Inflation.
Stocks are the absolute best at beating inflation.
If you own bonds, your return is fixed at, let’s say, 2% or 3%. Meanwhile, inflation may be 7% to 9% annually. In this scenario, you are losing money, because you are not keeping pace with inflation – let alone beating it.
Stocks will give you the best chance of beating inflation over time.
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