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Stock Market

Investing in the stock market has always been an effective way to build wealth. In today’s low interest-rate environment, it has become a necessity.

Since the Great Recession in 2008, the Federal Reserve has kept short-term interest rates—called the “federal funds rate”—mostly near zero. That means the traditional ways of saving your money and watching it accrue—certificates of deposit, money-market accounts, Treasury bonds—are no longer viable. Investing in the stock market is one of the few viable ways to have your money work for you these days.

Of course, stock market investing comes with more risk than a safe, low-yield savings account. Inevitably, not all of your investments will be winners.

In investing, no one really knows for sure what’s going to happen. Over time, however, stocks tend to rise. History tells us this. Since 1928, the average annual return in the S&P 500, the benchmark U.S. stock index, is 10%. So historically, the average stock rises 10% per year.

Successful investing is largely dependent on market timing. You can’t just buy any stock and assume it will turn a profit, much less return 10%. You have to buy the right stocks at the right time.

For example, if you bought stocks in 2018 and sold them at the end of the year, you probably didn’t fare so well. The S&P 500 was down more than 6% that year. However, if you bought stocks at the beginning of 2019 and held on to them through 2021, you probably made a lot of money. The average annual return from 2012 to 2014 was more than 23%.

But, of course, your return would have depended on what stocks you actually bought. Take Facebook (FB), for example. The largest and most recognizable social media company in the world has been one of the best-performing stocks of the last decade, but it was down after its first year of trading, despite the market being up during the same stretch.

That kind of unpredictability scares some people away from investing in the stock market. The track record over time should be enough to convince you otherwise.

The stock market is a vast and ever-evolving place, and there are many ways to approach stock market investing.

Want to invest in safe companies that offer a steady stream of income? You’re probably a dividend investor.

Are you willing to take on a bit more risk to go after bigger, faster rewards? Growth investing is likely for you.

Value investing is for investors who like to bargain shop.

Options trading is for those who like to invest based on statistical probabilities. And so on.

At Cabot Wealth Network, we have something for every investor. We publish 15 investment advisories that cater to various types of risk tolerances and timetables, depending on your preference. Since 1970, we’ve been helping investors of all experience levels achieve market-beating returns, helping our readers double their money more than 30 times over.

When done right, investing in the stock market can be a hugely profitable endeavor. For more than a half-century, we’ve been helping investors maximize those profits—and hope to continue doing so for another 50 years.

Stock Market Post Archives
The market has turned choppy, but these three momentum stocks have room to run and catalysts to help them outperform even if the market stays soft.
Moving averages can provide excellent buy and sell signals when used properly, here are a few guidelines to help you improve your trading.
There’s plenty of data that suggests the calendar matters when it comes to investing. But should seasonal investing be part of your plan?
Oil prices have rebounded nicely from historic lows. As energy stocks rise, these three oil ETFs are an efficient way to play the rally.
“When should you sell a stock?” is a common question for investors, these tips can help you determine when to sell your winners and losers.
A 3x ETF magnifies returns, both good and bad, but should you make room for them in your investment portfolio?
We’ve been using the following market timing indicators for decades, and they’ve served us quite well. Here’s how they work.
With the marijuana sector being discounted, now is a good time to consider investing. Let’s examine all 8 marijuana ETFs, and the 3 I like.
In the midst of another stock market correction, it’s important to know how to distinguish between good buy-low candidates and lost causes.
The economy isn’t the same as the stock market, but it doesn’t matter right now as both are strong – and it’s a good time to invest.
The stock market performance under Donald Trump was strong. But history says investors favor a Democrat in the White House.
In bull markets, the 200-day moving average is pretty useless. But during extended corrections like this one, it’s an invaluable indicator.
The best bit of Warren Buffett investment advice didn’t come from the man himself, but the legendary investor’s family. It doesn’t just apply to investing.
Putting your money in an S&P 500 index fund has long been deemed a safe way to diversify. But the S&P isn’t all that diversified anymore.
It’s important to know how to manage your own money so you can make the choices that are right for you and your financial picture.