All that talk about time is money and the power of compounding. How a person investing in their 20's would have so much more than a person investing in their 30's, etc.... Well, the power of compounding won't work very well if the market is doing poorly. As of today, my IRA is giving me a yield of $200, which might go away, depending on whether interest rate will be cut or not, while my saving is yielding $237. Gagh!!! I want my anticipated annual 10% return from stock of $600 instead of tethering on a big fat ZERO.
It's not adding up
September 11th, 2007 at 11:13 am
September 11th, 2007 at 08:01 pm
The stock market makes 10% on average over many, many years. It means that in 2001, 2002 and some of 2003 it dropped by 10%, then rose in late 2003 and 2004 by 20%. I know it doesn't help you right this moment, but you want to buy low and sell high - follow stocks first to see trends, then buy when its cheap.
September 12th, 2007 at 06:47 am
Look at it this way, if it stays down while you are young, even better. You get to purchase more at a discount. All that really matters is when you take it out. You have to think long-term. I am thrilled things are lower these days because I want to infuse a lot into the market next year. This is good for young investors who don't have much to lose at this point. I worry the volatility will bug me more when I have more. Though should continue to think long-term.
September 12th, 2007 at 11:40 am
September 14th, 2007 at 11:26 pm
I understand very well that stocks to not compound annually, but after reading and hearing about 10% compounding over and over and over again, I keep expecting my stocks to do the same.