Want to Retire Rich? Do These 10 Things

It’s far more important to be invested in the market and stay invested in the market.  You only start touching your investments when you need to adjust your allocations, whether for imbalances or age.

1. You cannot miss the 10 best days

According to Putnam Investments, if you invested $10,000 in the S&P from the end of 2003 to the end of 2018, you’d have $30,711. That’s an annualized total return of 7.77%. If you missed the 10 best days of the S&P 500, you’d have just $15,481. That’s an annualized total return of only 2.96%.

2. Corrections are common

From the Department of Don’t Freak Out: Corrections are common. A correction is a 10% drop in a stock or the stock market from its most recent high. 10% isn’t a lot and “correction” is such a benign-sounding word but market pundits seem to trot it around like it’s doomsday every time they get a chance.

3. Inverted yield curves are not predictive

If you were listening to the pundits late last year and earlier in 2019, you probably heard them mention the inverted yield curve. What this means is that in the latest Treasury bond auction, one of the shorter term bonds was priced at a higher yield than a longer term bond.

4. The best portfolios are forgotten

In a chat between Barry Ritholtz and James O’Shaughnessy on the Masters in Business program on Bloomberg Radio, O’Shaughnessy shares a Fidelity study that showed the accounts that performed the best were the ones that were forgotten. 

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