The stock market, as measured by the S&P 500, has shown an affinity toward investors who are willing to remain patient by holding stocks over long periods of time. The three pie charts above show the percent of periods the stock market was down over various holding periods. In the 61 one-year periods from 1945-2005 the stock market was down in 14 years. In the 56 five-year periods the stock market declined in five of those periods, but in the 46 15-year periods the stock market was not down once. Patience has certainly proven itself as a virtue when it comes to investing.
2 comments:
i think the idea is half truth. It may be true that over 15 year period all come up positive gain. But how much gain? If only 1 or 2 % gain over 15 year period, the investor who hold for 15 year will lose out in opportunity-cost. Even he put the money in the bank for 15 year with interest of 3% per annum, he will gain more than 50%.
Asset allocation and stock selection are important too. Stay with the good quality stocks.
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