Best Long-Term Investment
Stock market is the most profitable investment in the long term
It historically outperformed all other investments
Beyond real estate, and without all its constraints and fees
It allows to diversify
by geographical zones (USA, Europe, China…)
by sectors (industry, health, environment, telecom …)
by types of assets (stocks, indexes, bonds, commodities …)
You can sell your shares at any time of any day the market is open and get your money quickly if you need
Evolution of the S&P500 index and the real estate, over 100 years, you clearly see in spite of the strong fluctuations, the performance of the stock market is clearly superior.
(source: https://www.longtermtrends.net/stocks-to-real-estate-ratio/ )
Average returns of different financial assets over a period of more than two centuries, stock market is, again, largely above.
(source: book ” Stocks For The Long Run“, written by Jeremy Siegel.)
You can do better than just follow the index
You can reduce risk and volatility in crash period
Even in times of stock market crash, some portfolios were slightly positive, others held up very well
annual returns of two portfolios between 1999 and march 2020
.
Diversified portfolios with good allocation, helps managing risk and reducing volatility because they are composed of non correlated assets
PERFORMANCE OF A 10-YEARS DIVERSIFIED PORTFOLIO (BETWEEN 2007 AND march 2020)
10,000$ invested in 2007, in march 2020 worth is 27994$
Now, same portfolio but this time you saved 1000$ every year that you had reinvested in this portfolio, will be 52318$ in march 2020
