Stock Market Ghost Stories (Spooky!)
If you let the pundits and the media get to you, the stock market can seem like a spooky place. But we’re here to debunk the most common ghost stories we hear about the stock market because usually, it pays to invest. Literally.
“You won’t get your money back.”
10-year stock market returns have averaged 9.2% over the past 140 years. (Source). Enough said. If you’re throwing cash in a High Yield Savings account, you’d be lucky to be making a 1% return right now…
“You don’t know enough to get started.”
There are lots of ways to invest in the stock market, but robo advisors like Betterment, Wealthfront and Titan make it so easy to get started. Most of them will ask you to fill out a profile to tailor your holdings based on factors like age, investment goals, and your risk profile. Plus, robo advisors can require as little as $10 to open an account. Compare the options on Nerdwallet.com
“You won’t make any money.”
Well, here’s the thing: you can’t save your way to millionaire status. Considering the average inflation rate is ~2%, if you’re saving your money in cash—even in a high-yield savings account—you could be losing purchasing power with every passing year. Just take a look at this graph comparing a woman who started with $10K and invested an additional $1K/month for 10 years in a high yield savings account vs the stock market. It’s only a difference of $1 million+!!
Bottom line: investing supercharges your money in a way that saving in cash just can’t.
“You’re going to lose money.”
Unlike starting a business or buying a house, you can only lose the amount of money you put into the stock market. Generally speaking, you’ll never owe anyone if a stock tanks—you just won’t get your initial investment back. Not true with a mortgage on a house of business loan where if things go south you’re still on the hook for the entire debt plus interest!
“Now’s not a good time to start investing.”
It’s natural to cycle through bull (downward-trending) and bear (upward-trending) markets. In fact, the last bull market lasted 10 years. (Source). It’s impossible to time the market, no matter how seasoned you are, which is why we recommend dollar-cost averaging, which simply means investing a fixed monthly amount over a long period of time.
Does that mean you can’t invest more when stock prices are down (aka on sale!)? No. But by continuing to invest over the ups and the downs, you’ll average out whatever gains or losses you may have experienced had you tried to time the market.
If the stock market still feels overwhelming to you, we totally get it. That’s why we created the Wealth Circle—so women could learn to invest side-by-side and hold each other accountable to actually doing it...and getting damn good at it too.