If you pay attention to the stuff on TV and the business section in the newspaper, you will never know what stocks to buy and sell. In order for Wall Street to make a lot of money, they need to keep you guessing so that you keep making changes and generating commissions (cha-ching).
Here's what you need to know about the stock market:
- You must have patience—that means willing to look out 10 years
- You must have a system from which you will not deviate
- You must not listen to stock "experts" on TV
Look at these four charts and you will see what patience means in the stock market.
Based on history, the chance of making money in the stock market:
- Chance of making money in stocks in any given year = 70%
- Chance of making money in stocks in any given 5 years = 89%
- Chance of making money in stocks in any given 10 years = 97%
- Chance of making money in stocks in any given 15 year = 100%
Therefore, if you want to make money in the stock market, to have the odds in your favor, leave your money in for 10 or more years. If you don't know what to buy, then buy the S&P 500 index or use a structured system. What you cannot do is listen to people on TV or people in the newspaper and buy what looks good. You must have a stock investing system that tells you what to buy or sell or just buy the index.
That's all there is to the stock market. This is how guys like Warren Buffet make money. They don't trade. They sit and wait for the money to make them money.