The rooms have no clocks or windows.
You can’t tell if it’s two in the morning or afternoon.
Pretty ladies offering free drinks add to the deception.
Casinos don’t want you to be aware of this one thing…
They’re specifically designed to make you unaware of the passage of time.
Because time is their biggest edge.
In baccarat, the house edge is as low as 1%. For every $100 wagered, the casino will make around $1. But in roulette, it’s around 5%. And for slot machines, it’s as high as 15%.
So, you can see why casinos want you to stay. The longer you stay, the odds of you losing money are inevitable.
But the stock market works in the exact opposite way…
U.S. Growth Wave
The longer you stay in the market, the better your odds of making money.
In fact, since 1945, the stock market has gone up 70% of the time. Over that period, the U.S. economy grew most of that time.
So, the time you spend out of the market is what increases the odds of you losing money.
Putnam Investments recently looked at staying invested over the last 15 years.
They found that by missing even just 10 of the market’s best days during that entire period, your returns would be cut by more than half!
And that’s why trying to guess the 30% of the time that the market was down would’ve been a huge mistake. You most likely would’ve missed those 10 up days.
This is especially important to keep in mind during the current market drawdown. Here’s why…
Just Stand There
Right now, many investors are trying to exit the market and get back in at lower prices.
But all they’re doing is stacking the odds against themselves. They’re interrupting the power of compounding and miss out on the biggest returns over the long term.
The way to make money isn’t by timing the market or getting out during pullbacks. It’s by doing just the opposite: staying in the market and going about your life.
Alpha Investors know this well. In fact, our best-performing winners in our model portfolio are also some of our longest-held positions…
- Marvell Technology Inc. (Nasdaq: MRVL): Over 260% in three years.
- Arista Networks Inc. (NYSE: ANET): Nearly 200% in two years.
- KKR & Co. (NYSE: KKR): Nearly 120% in three years.
So, if you’re looking to get out of the stock market to wait until things “settle down” … don’t.
Because most of the stock market’s returns have been concentrated in periods of the greatest fear — like right now and at the end of bear markets.
The huge run-ups come right after. And if you miss out on them, it’s nearly impossible to catch up on those gains.
I don’t want you to be one of the many investors who are panicking right now. These pullbacks are normal. It’s the price we pay for higher returns.
And they’re giving us a great opportunity to look for opportunities trading at bargain prices. Just stay patient and don’t sell out of quality businesses.
Founder, Alpha Investor