Investing is definitely something you need to think about in the long run. Quick returns are rare, so it’s easy to feel let down when things don’t go as planned. With recent market underperformance, some people start doubting their financial choices. However, if you stay motivated through the ups and downs, you can reach your goals, whether that’s a comfy retirement or financial freedom by a certain age. Investing is still one of the best ways to grow your wealth and secure your financial future.
Sticking to your investment plan is crucial, but how do you stay focused when the market drops and your investments seem flat? Here are some tips to keep you active and motivated, no matter how your investments are doing.
THINK OF IT AS A SALE
The market has been down recently, and your investments might have taken a hit. So why keep investing? Think of it like buying your favorite items on sale. Let’s say you love Honeycrisp apples for their unique taste but they can be expensive, usually $7 to $9 a bag. But wouldn’t you prefer to buy them at $4 or $5 during a sale? Most of us love a good deal, and it’s the same with stocks. When the market goes down, you’re essentially getting stocks at a discount. Once the market rebounds, those cheap stocks you bought can increase significantly in value.
REMEMBER THE MARKET RECOVERS
A key takeaway from the book “The Simple Path to Wealth” is that the stock market always bounces back. Sure, there will be years when the market slumps, but long-term trends show it going up. This idea is crucial for keeping your motivation up. In 2008, many investors thought the market crash was permanent and sold off their investments, but the market eventually recovered. If you’re investing for the long haul, say 40 or 50 years, short-term downturns are just small bumps in the road.
KEEP LEARNING
Staying interested in investing means constantly educating yourself about the market, portfolios, and finance in general. Instead of stressing over market fluctuations or news, focus on learning. Read books, take classes, or use online resources to expand your knowledge. Understand terms like ‘Bear Market’ (current downturns) versus ‘Bull Market’ (periods of growth). Your brokerage might offer free webinars or educational tools to help boost your understanding. The more you learn, the more confident and motivated you’ll feel.
ENVISION YOUR FUTURE
Think about why you started investing in the first place. What are your investment goals? Picture your future once you reach financial independence or retire. Maybe you imagine owning several properties or traveling the world. Think about your typical day in retirement—reading, hiking, or volunteering. Visualizing your future can remind you why you’re investing and keep you motivated. While emotions alone aren’t the best decision-makers, they can inspire you to stick to your financial plan.
IN CONCLUSION
It’s easy to feel discouraged if contributing to your 401(k) seems like a sacrifice or if the market keeps dropping. But staying motivated is key. Remember, investing is a marathon, not a sprint. There will be highs and lows, but the long-term benefits are usually worth it. Think of your contributions today as seeds for a bountiful future harvest.