Generating gains isn’t always about timing; sometimes, it’s about playing the long game…
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| Today, I will tell you why staying in the market is one of the best ways to build wealth. Curious? Keep reading below to know more! Generating gains isn’t always about timing; sometimes, it’s about playing the long game… Over 379,000 became millionaires in the U.S. last year… and this wealth surge didn’t come from luck nor leverage. Nor was it crypto, private equity, and even some secret investing club that has exclusive access to initial public offerings (IPO). The main driver of massive wealth gain? The good old U.S. stock market!
According to investment bank UBS, total global wealth rose 4.6% last year, with the U.S. outpacing every other nation in average wealth gains. While France, Germany, and Belgium fell in the rankings, U.S. investors rode an almost 24% surge in the S&P 500 to new highs. This is a powerful reminder of how powerful long-term investing can be. More importantly, this tells us that the key to wealth creation isn’t timing the market, but staying in. The biggest gains don’t come from impeccable timing… they come from showing up and sticking around the stock market. According to Professor Joel Litman , Chairman and CEO of Valens Research and Chief Investment Officer of Altimetry Financial Research, each time you jump in and out of the market, you risk missing out on massive rallies. Rallies, which Professor Litman emphasizes, don’t just benefit hedge funds nor algorithmic traders but also retirement accounts. According to Professor Litman, compound interest is the most powerful engine behind wealth creation, as each time your portfolio’s value rises, you gain a bigger base to grow in the future. The same is true if a company pays a dividend that you then reinvest. That’s why if you get out of the market—whether it’s to avoid a downturn or chase a rally—you’re at risk of missing out on the most impactful up days. While that may not seem like a big deal, missing just the 10 best days in the market since 1995 could cut your returns by 54%. Simply said, compounding works when you don’t interrupt it. Building Wealth The surge in new millionaires provides an important lesson: If you want to build wealth, you must have money in the stock market. From pensions to stock-based compensation, exposure to equities is baked into how America builds wealth—with the latter funneled back into the economy through spending and investing, reinforcing the cycle. Remember : Compounding works best for those who stay in the game. You may not be able to predict when the best days will come, but you can participate in them. Hope you’ve found this week’s insights interesting and helpful. Stay tuned for next Wednesday’s The Independent Investor! There’s a quiet shift happening right under everyone’s nose… Learn more about the real score with artificial intelligence (AI) in next week’s article! |
Miles Everson
CEO of MBO Partners and former Global Advisory and Consulting CEO at PwC, Everson has worked with many of the world's largest and most prominent organizations, specializing in executive management. He helps companies balance growth, reduce risk, maximize return, and excel in strategic business priorities.
He is a sought-after public speaker and contributor and has been a case study for success from Harvard Business School.
Everson is a Certified Public Accountant, a member of the American Institute of Certified Public Accountants and Minnesota Society of Certified Public Accountants. He graduated from St. Cloud State University with a B.S. in Accounting.
