It’s common for people to think that you have to know something to make money in the stock market. If you don’t it feels as if you’re just throwing your money into a dark hole and hoping for the best. The stock market can be like believing in Jesus — one way to look at the overall stock market is that it will one day get you to heaven. You just have to believe.
During the Great Depression, 1970s, tech bust and the Great Recession you may have questioned your faith but the market has always pulled through. The trajectory still appears to be heavenly.
Past performance is not a guarantee of future returns but what is certain is that if you were invested in the S&P 500 index anytime before 2018 you would be up on your investment. You can pick individual stocks for greater returns but then you might have to know something.
What will happen in the future is anyone’s guess but I think the most rational answer is that this chart in the long term will continue going up. If you don’t believe it will then you’re betting that America is soon going to shits and will never recover. From my experience the ones who believe the world is going to apocalypse mode are the ones who don’t like how their life has turned out. I know because I used to be one of them.
It’s not all fun and games in the stock market. There can be periods of frustration such as the years between 2000 and 2013. If you had invested in the height of the year 2000 then you would have ridden a roller coaster just to be even in the year 2013. That sucks. If you had contributed to your investment all the way through though you would have made out just fine. Buying on dips is quite imperative.
This is not investment advice. I’m just presenting the facts. As far as history goes all that you had to know to make money in the stock market was to contribute regularly to an American index fund, have a long-term mindset and not panic sell.