Options traders are sometimes so focused on the short-term they forget about long-term time investing. Both strategies will help you build wealth.
As a short-term trader, I readily admit that I often get too focused on what will move markets quickly (and affect my positions). I move from a bullish stance to bearish and back again. Sometimes it feels like I’m going through revolving door solely driven by price action.
When I have a moment, I like to step back and remind myself that the long term trend of the market is higher. And I need to take advantage of that.
Long-term investors who pay less attention to the short term noise steadily grow their wealth. That’s a fact. Even with big market crashes and so many corrections you’d easily lose count, the markets have moved higher over the past 100+Â years.
They know that adding more money to their investment portfolio on a consistent basis, even a small amount each period, can create enormous wealth.
You might be reading this thinking, “Duh, I know that.”
But the reason I’m writing about this topic is because many short-term traders, including some very successful ones, don’t invest in the markets for the long-term. And that’s a huge mistake.
Time investing is actually MORE important than price investing
Let’s say you invest $100 every week over a 30 year period and earn an annual return of 7% (historical market average). You’d invest $150,000 but end up with $500,000 (assuming an average annual inflation of 3%). Add more money as your earnings increase, and you’ll compound your wealth, pushing your total toward seven figures.
But what if the market crashes? Great! You can buy even more shares at lower prices.
Think about how a long-term investment in the stock market would make a difference in your retirement years. You wouldn’t have to rely on Social Security or a pension.
If you’re young, start early and be consistent. If you’re not young, step it up and add more to make up for lost time. It’s never too late.
