Investing in Stocks Is Simple, but It's Not Necessarily Easy

by Jeff C. Johnson

Investing in stocks can be simple. But it’s not necessarily easy.

In fact, it can be completely overwhelming.

It’s simple because today’s mutual fund offerings are low-cost, well-diversified, and tax-efficient. They make investing uncomplicated and straightforward.

But the constant attention by mass media makes it difficult. 24/7 information access to prices via the internet or a mobile phone app.

Watching the market move makes it a challenge to be patient, to maintain long-term thinking. Especially when the market values drop dramatically. 

The long-term investor should mostly ignore the stock market’s ups and downs.

Sometimes the media indicates that you should be making decisions to enhance your returns. This is not true—lots of buying and selling activity is not ideal. But familiarizing yourself with the history of the market will help you chill when markets decline.

Don’t try to guess the direction of the market in the short term. Instead have confidence in long-term gains.

Longer terms, like thirty or forty years—which an investor should be thinking about—have even more predictable results.

Understand and commit to maintaining a long-term view before making your first investment.

Your financial security will appreciate it.