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Getting an annual 10% ROI for idiots…
By Mike Wang | August 7, 2007
data obtained from yahoo finance , click here to see a larger image
You can see that for the past 50 years, the S&P 500 index fund has been averaging about 12.08% with dividends reinvested. But why is it that most investors are not able to capitalize on this great and relatively risk free way of investment?
This is because the market is not always increasing! As you can see from the graph, there are certain periods that the S&P 500 is dropping due to economic crisis but this should be a great opportunity instead of a disaster! We can buy in more when it is cheaper and when it rises, we can sell it off for a healthy profit.
For the investors that are interested in an early retirement, we should stay invested for as long as possible. In fact, the greatest investor, Warren Buffett has commented that his favourite holding period is forever! If you stay invested for longer than 5 years, the risk of of loss is practically almost zero, as the market although would fluctuate on the short term, it always increase in the long term.
In the next article on finance, i will talk about some of the ways where you can buy S&P 500 index funds
Topics: Finance |
August 16th, 2007 at 2:10 am
Hi Mike, Lois & Kiara!
Thanks for linking me to this site. Good job in getting started! See you guys at the next subscribers nite!
P.S. You may wanna check your right side bar cos the wordings has been cut off… bleahz…