A Guarantee That’s Not Truly Guaranteed

Do you want a guaranteed investment return? If you answered yes, I hope you added the condition that it depends on who is providing the guarantee and what that guarantee actually is.

Many people avoid the markets because they are “too risky” and offer no principal or return guarantee. I understand that viewpoint when considering short-term market behavior. However, for those that are saving for retirement or other long-term goals I don’t think there is any better place to invest than a well-diversified stock portfolio that broadly participates in the global economy.

Since the first two humans connected on this earth, the global economy has been in a steady state of growth. Neither ancient world wars nor modern ones have been able to unseat this trend for much longer than a few years.

Any chart of stocks over any extended period looks the same: a fairly steady swoop up and to the right.

Of course, there is no guarantee this will be the case going forward. There are any number of economy-ending scenarios we can dream up in today’s well-connected world. But in my opinion, the human drive to be better (more efficient, faster, and to create better lives for ourselves) is not going to end anytime soon.

The best way to tap into this growth is through stock market investments.

So, what do you think? Do you consider when you’ll be needing funds prior to investing? For money you won’t use for 20+ years, why do you look at your monthly statements? Do market dips cause you pain or are you confident your investment plan will deliver what you need in your lifetime?

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