Less is More in The Stock Market

Photo by Anna Nekrashevich from Pexels

Many people believe that day traders are the most profitable people in the stock market. To some degree, that’s true — especially if they really know what they’re doing and manage their risk properly. 

If you’re just a regular person like me who doesn’t have a finance degree or years of experience investing, this article is tailored to you. 

As someone who started investing more seriously during the Covid drop back in February of 2019, I’ve seen massive growth in stocks. The market basically shook off the losses and recovered impressively. 

Here is an excellent example of a time in the market winning over timing the market.

The ticker symbol $SPY is an ETF of the top 500 companies in the stock market weighted together. The big drop towards the 3/4 part of this graph shows the COVID-19 panic selloff.

Within the year, the value of these major stocks has nearly doubled. The market took a nosedive and actually came back much stronger than expected. 

This proves why time in the market is better than timing the market. 

There’s much more room for error in timing the market.

You could take bigger risks for bigger rewards by doing swing trading, day trading, or betting on stocks with options trading. But if you’re not ready to lose everything you put in, then you shouldn’t do it.

Many people see fast money come in for certain individuals and assume that it’s easy to make money in stocks.

Sometimes it is. But the far majority of the time, it isn’t.

These are two examples of stocks that were fairly priced and took off at a ridiculous pace. Every once in a while, you get these crazy plays, and your investments pay off tremendously. 

Who knows what these could be worth in five-ten years. 

Final Thought

When you pick quality companies and plan to hold for the long-term, great things can happen.

But when you pick quality companies, take profit off the table, go somewhere else to make money, then end up making a bad decision, you can’t take it back.

Be sure to invest in stocks you have high conviction in and hold for the long term — that’s how winning in the stock market is done. 

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