Stock Investing 101

Over the last 100 years the American stock market has averaged around 10%. That means if you invest 1000 dollars the next year, on average, you will have 1100 dollars.

That is quite remarkable when you consider everything that the United States has been through. Two world wars, a few other major wars, the great depression, several stock market crashes. The fact of the matter is this: The stock market is a great and maybe the best place to invest your money in over the long haul. You do not have to be a genius to succeed. Buy an index fund or buy ten or fifteen different blue chip companies that you know will be around in 50 years or so.

Over the next 20-50 years you want to invest your money not only in American companies but companies that do business overseas as well. The US’s GDP will rise around 3 percent a year over the next 50 years while China’s GDP will rise around 8 percent a year. This means there is a lot of opportunity in China and elsewhere around the world.

Do not be phased by downturns in the stock market, the stock market rarely ever “crashes” and when it does that represents a great opportunity to buy quality companies at cheap prices.