Don't Want To Lose Money In The Stock Market? Buy And Hold For 20 Years

The longer you hold stocks, the better your inflation adjusted returns are, AllFinancialMatters demonstrates. For instance, compare the S&P 500 Annual Real Returns from 1926-2006 with a 1-year holding period vs a 20-year in the picture above.

For a 20-year holding period, there are zero negative returns. Kinda astounding. However, the peaks are dramatically less than can be achieved in a 1-year time span. There’s a story about a turtle and a bunny that may be applicable here.

Then again, as commenter Ironchef points out, these results are in aggregate. Some individual stocks are just dogs no matter how long in the tooth they get. — BEN POPKEN

Why the Long-Run Is So Important When Investing in Stocks [AllFinancialMatters]