When it comes to investing your money, tote guys have the right idea.
You see, there is this funny story that gets passed around on Wall Street. The way this story goes, one day major bean counters at financial giant Fidelity did this big study of what types of investors were doing best. And they found that the accounts with the highest returns were classified as “dead or inactive”.
In other words, dead people do better than living people on the stock market, and that’s because dead people don’t always mess around with their investment accounts like living people.
The only problem with this cool story is that there is no evidence that it ever really happened. The Google results provide many stories about this supposed “study” – but not an actual study.
Apparently it’s an urban Wall Street legend. But hey, that doesn’t mean the point isn’t there yet. As most people will tell you, time and patience are the greatest things that work on an investor’s side. Trying to time the market, panic sell, or buy on FOMO will almost never outperform long-term investments.
So, real or not, these dead investors are after something. Here are four things the dead can teach us about investing:
1. Buy and hold
Dead investors are the ultimate buy and hold investors – in this case we mean they just stay consistent. As a rule, dead people behave very consistently.
We asked Robin Hartill for advice on the stock exchange. She is a certified financial planner and financial advisory columnist for The Penny Hoarder. She recommends budgeting a certain amount of money for the investment every month, no matter what.
“The S&P 500 has achieved an inflation-adjusted return averaging about 7% per year for the past 50 years,” she said.
Not sure where to start? It’s easy to set up automatic transfers so you can regularly invest in an app called Hide. You can choose from hundreds of stocks and funds to build your own investment portfolio. It makes it easy by dividing them into categories based on your personal goals.
2. Do not try to time the market
The dead know better than anyone else that the passage of time is the most important thing. This also applies to investments.
In other words, don’t try to time the market. It’s a breeze to try to anticipate the various booms and crashes that the stock market will inevitably go through. Instead, invest as early as possible and focus on the future.
“The timing of your investment is much less important than the time you have to invest,” says Hartill. “The cost of waiting for the perfect time to invest is high. You’re missing out on long-term growth. “
All the more reason to register Hidewhere you can start with just $ 1. *
3. Take out life insurance; Prices start at just $ 16 / month
There are two types of dead investors: those who have taken out life insurance to help the loved ones who left them behind; and dead people who wish They had life insurance.
Have you thought about how your family would do without your income after your death? How are they going to pay the bills? Send children through school? Now is a good time to start planning for the future.
You are probably thinking: I don’t have the time or money for it. However, your application can take minutes – and you can call your family up to $ 1 million at a company called To lend.
Prices start at just $ 16 per month. Knowing that your family is being looked after is invaluable.
If you’re younger than 54 and want a quick quote on life insurance without going through a medical exam or even getting off the couch, Get a free quote from Bestow.
4. Don’t overthink things
Dead investors are great at not rethinking things. They just join in and do their thing without a fuss. This is why their investment portfolios are doing so well.
When it comes to investing, be like a dead man. Don’t overthink things.
Hartill’s advice: the stock market will make you money if you give it time. So you can start sooner rather than later.
“If you were hoping to bounce back from the stock market quickly, this may not be a good time,” she says. “Real investing isn’t about making money quickly, however. It’s about growing your money over time.”
If you Sign up for Stash now (It takes two minutes), Stash will give you $ 5 after adding $ 5 to your investment account. Subscription plans start at $ 1 per month. **
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He is not dead.
* For securities priced above $ 1,000, fractional purchases start at $ 0.05.
** You also bear the standard fees and costs included in the pricing of the ETFs on your account, as well as fees for various ancillary services charged by Stash and the custodian.
This article originally appeared on www.thepennyhoarder.com