Focus on the Long Term

Oct 2005 //
Risk vs. Volitility
Economics

Simply put, monthly stock market returns have almost nothing to do with changes in the economy or corporate profits.  In contrast, long-run stock market returns have everything to do with economic growth and corporate earnings.  Smart investors focus on long-term investing, because long-term economic changes can be researched and analyzed.  Short-term “investing” can be a dangerous game to play, because … it is virtually impossible to predict Mr. Market’s mood swings.