Despite 91% of women saying it’s important that they feel confident in their abilities to invest, 58% of these women don’t have any interest in learning about the stock market. As USA TODAY reports, millennial women show less interest and confidence than millennial men when it comes to the stock market. For instance, 49% of women, compared to 69% of men, agree the stock market is the best place to invest for retirement.
At some point, ladies, you’re going to need to take the stock market plunge. Why? It’s the best way to grow your money over the long term. I’ve referenced three key quotes from stock market ninja Warren Buffet to help you acclimate yourselves.
The Stock market has always come out of crises
“Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”
As of this writing, the Dow is at 17,400. The stock market will continue to grow because companies will continue to make things we want to buy, and need to buy. There are plenty of good companies with good products, and good people making them.
Think long-term
“You must also resist the temptation to stray from your guidelines: If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.”
I admit, I buy mutual funds instead of individual stocks…and you can too. But you know what? One of my first clients, all she did was buy AT&T stock for the 40 years she worked there. That was it. She liked the company she worked for and bought the stock. Didn’t hurt her AT ALL.
The more you trade, the more you underperform
“Sir Isaac Newton’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars, but not the madness of men.” If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases.”
My clients are shocked when I tell them where to invest and then don’t provide a regimented schedule for rebalancing—in fact, in 2008, I told them to not even look at their investments! Most people do poorly in the market because they trade out of emotion, not logic. It’s better to let something sit than to move your investments because you’re afraid.
Your Simple 3 Steps
Here are your takeaways from the Buffster (you can also call him Buffy Dub):
Get The Free Money. Make sure you’re in your company’s retirement plan if one is open to you, and contribute however much you need to get the employer matching funds. Don’t receive a match?!? Show them this post, they should totally be matching, you’re worth it.
Use The Target Fund. If someone works with me personally, I give them a fancy investment plan using multiple funds and asset classes. But you know what? To get started, you can start with any old fund. Lots of retirement plans offer funds that have the target date in the name, so just choose the date that seems closest to when you want to retire. Done and done.
Buy Systematically. Employer retirement plans make it easy to save consistently (you can max out at $17,500 this year). You might also have the opportunity to save into your Employee Stock Purchase Plan, which is a program for employees to buy the company’s stock, usually at a discounted price. Remember that client who bought AT&T stock consistently? This was how she did it, and then never sold it.
I know there are individuals who might not have access to a retirement plan through work. I honestly think that if you value your worth, you’ll ultimately choose to work for a company who supports your values (but in the meantime, you can always save into a Roth IRA or simply open an individual account so you have the flexibility to use the money for something other than retirement). Or, if you’re self employed, there are plenty of options to replace employer plans. Then just choose one fund, one stock, whatever, and START.
You see? It doesn’t matter what you do, just that you begin. There is no perfect stock or mutual fund. There is no perfect investment. All that matters is that you move forward, and then adjust and adapt as you need to. And that, my friend, is how you become a stock market ninja.
P.S. Did you find this helpful? You might be interested in the post I did explaining what you should do to prepare for the next stock market correction!
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