With all the ghosts, ghouls, and goblins running around your neighborhood (not to mention the economy!) it is all too easy to become a “Scaredy Cat” investor and panic at the first negative fluctuation in your investments. But investments are not designed to satisfy an immediate financial need. The purpose is to tuck away money today that will grow into a substantial amount over the course of many years.

Over the long term, investing in stocks offers the greatest return out of any other investment opportunity. From 1926 to 2008, the S&P 500 returned an average annual gain of almost 10%. To put this in perspective, a $10,000 investment today will yield a return of $67,275 over 20 years! Just think of how much less you would have made if the market had a downturn after 5 years and you pulled your investment out after a return of only $16,105. By allowing the market to recover and sticking with your investment decision for another 15 years, you will have made a difference of more than $51,000!

The key is to focus on the long-term value of your investment rather than short-term fluctuations in the market. The market will always have its ups and downs, its good years and bad years. The only way to be a successful investor is to keep this in mind and remember that over time, the market will always provide a positive return on your investment.

Related Posts:

1. Transitioning Into an Investor
2. Basics of investing
3. Investing in stocks
4. Investing in mutual funds
5. Asset allocation