Use The Markets Like a Tool
Investing has become a game to most, but it should never be approached this way. From meme stocks to crypto, many of you are being far too cavalier with your investments. This could be because we have been in an up market for more than ten years. Or you might feel this way because money has come fairly easy to you.
No matter the reason, there’s one fact you can’t avoid.
Your wealth is the primary driver of how you can care for your family. This seems to be a simple statement that we can all understand, but why do so many gamble their wealth away?
Many see the markets as a way to get rich quick. They submit to the mass amount of noise Wall Street sends out implying either that they are “missing out” on the next best investment or that any sort of steady, rational approach to investing is “old fashioned.”
Instead, with a little thought, we can see the markets for what they truly are: a way to participate in future economic growth over long periods of time.
Stocks and bonds are simply claims on the economy in the form of the corporations that issue them. As those issuers grow in financial health, we are rewarded through income and/or price growth for allowing them to use our money to fund their growth.
That’s really it!
When viewed this way, and assuming you don’t believe the end of the world is near, it’s easy to see that investing for the long-term makes the most sense. The world always moves forward, never back.
Ok, perhaps this approach is old fashioned, but it’s truly the only approach to the markets that makes sense. And guess what? Many old fashioned tools are still the best.
Have you used a hammer lately?