Topic: How To Invest

What is Pat’s commentary for the week of December 5, 2017

Article Excerpt

Dear Inner Circle member, If you want to succeed as an investor, it pays to understand these three key investing concepts, and recognize how they work together. Compound interest. Most investors get the power and appeal of compound interest—you leave your money invested, and you earn interest-on-interest. This is way more powerful than simple interest (when you get interest on your initial investment, but no interest-on-interest). The compounding effect also works in the stock market, if you let it. Too often, though, investors undermine the effect, in two ways. One is to let market timing and price predictions guide their investment decisions. Supposedly this will help you sell near a peak and buy back near a low. The problem is that to profit from the compounding effect, your money has to be in the market.  Market timing and price predictions rarely work as promised. But they’re great at getting you out of the market. Worse, you may guess right on market direction about half the…