Motley Fool Money Volatility = Price of Admission
Feb 20, 2022
Morgan Housel, bestselling author of "The Psychology of Money" and a partner at Collaborative Fund, joins senior analyst Maria Gallagher to explore the tumultuous stock market. They discuss the importance of spending time in the market rather than obsessing over yearly returns. Housel emphasizes viewing volatility as a cost of admission for future gains and highlights how 'boring' companies can lead to great investments. They also touch on the cyclical nature of the market and the power of compounding success through patience.
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Long-Term Focus
- Focus on staying invested for the long term, rather than chasing high yearly returns.
- Compounding's magic works best with average returns sustained over a long period.
Embrace Volatility
- Expect and endure market volatility; it's inevitable for long-term investors.
- Staying calm during market downturns, like 2008 and 2020, is crucial.
Volatility as Cost
- Volatility is the cost of admission for long-term investment rewards. Reframe downturns as inevitable expenses, not failures.
