Multi award-winning Chartered Financial Planner, Certified Coach, author of The Money Plan and Sunday Mirror columnist
We have recently marked the 80th anniversary of VE Day – Victory in Europe. It was a moment to reflect on the courage, resilience, and long-term vision of a generation that rebuilt after unimaginable hardship.
As we paused to honour their legacy, it struck me how these same qualities; patience, perspective, and a steady resolve, are also relevant when it comes to how we approach our money.
Investing isn’t about quick wins or reacting to the latest headlines. It’s about believing in the future, even when the present feels uncertain.
Successful investors hold firm during difficult times, knowing that the tide eventually turns. In today’s column, let’s explore what that mindset looks like in practice and how it can help you grow your wealth, the smart and steady way.
Embrace uncertainty
The stock market does not go up in a straight line, which is what often worries people about investing. But as investors, we are rewarded for the uncertainty we take in the stock market.
Over the last 100 years the world stock market has returned around 10% on average per year, but hardly ever is it close to 10% in any given year. Some years it’s far higher, and others it’s negative. We can’t make this uncertainty disappear so we should embrace it, by buying into the world stock market and holding on for decades.
The stock market has delivered a positive return 75% of the time, or another way to look at this is that the stock market is only negative one in every four years.
Gambling is not investing
This is important. Gambling is a short-term bet, if you treat the stock market and investing like a casino, picking your favourite share and trying to ‘buy low, sell high’ then you may well end up sorry.
If you bet on the stock market in this way, you need to be right twice: when you buy and when you sell. Investing on the other hand is a long-term game; you buy, sit tight and go off to enjoy your life. The sooner you start, the luckier you could become.
The odds of winning are higher in the stock market too; Blackjack can have odds of 48%, compared to the long-term stock market index at 99.9%.
Tune out the noise
If an investment sounds too good to be true, it probably is. Fads come and go, but the world stock market is still here. TV experts’ tips, my neighbour’s “next sure thing”: these are entertainment, not investments. You can do well without insider secrets, being in the know, or first in line. While sometimes the world stock market may seem chaotic, there is a form of order which rewards the long-term buyer.
What should I do?
I’m often asked: “If what you say is true, why do so many people try to beat the market, why not just accept the market return and leave it?”
Because we all want to think we are better than that. Just like we think we are a better than average driver, employee or lover.
You’d do very well by buying a world index fund and leaving it alone for as many years (not months) as you can. Your future self will thank you.
- For more investment and financial planning ideas search for The Finance Geeks podcast.