The majority of the money you're going to invest is for the long-term (or bucket three as we like to call it), which automatically qualifies you as a long-term investor, and since 1926 the average return for the US stock market (as measured by the S&P 500 Index) has been around 10%. As the graph we've included here shows, you rarely make that return in any given year, as yearly returns have fluctuated from a high of +54% to a low of -43% over the graph's 94 year timeline!

That is why the long-term average return is  only achieved by those who have a financial plan and stick to it, as opposed to investors that react to the inevitable market corrections that happen with frequent irregularity. More specifically, successful investors are not smarter nor do they have more information, they are simply better able to quell their feelings of fear and greed, and act prudently as opposed to reacting when the inevitable market declines (sell!) and manias (buy!) happen.

Successful investors always hold cash for their fixed spending requirements, buy when markets sell off, and avoid fads and manias. They do not get distracted, they do not believe the end times are coming, they do not get distracted by their friends' investments, or try to keep up with or get obsessed with beating some short-term benchmark. They don’t dwell on who the President or Prime Minister is, they simply understand that historically the market has gone up about 75% of all calendar years, while the media focuses 100% of their energy on the 25% of years that the market might, or does, or should go down. Successful investors do not fear market selloffs, they embrace them, and they are long-term optimists. Unsuccessful investors will tend to continue to tune in to the daily soap opera that has become financial “news”, which is funded by and designed solely to sell advertising.

As the seeds of spring break out, we are reminded of renewal, for just as the seasons renew and change, so does the economy, which rewards long-term investors.

We all look forward to getting outside and embracing life and feeling the sun.

Have a great April and enjoy spring with your loved ones.

Randy and Ian, and the team at R&R Investment Partners

Image source: Dimensional