When it comes to investing your money, the dead have the right idea.
You see, there’s this funny story circulating on Wall Street. The way this story goes, one day, chief executives at the financial giant Fidelity did this big study on what kind of best-performing investors were. And what they discovered was that the accounts with the highest returns were rated as “dead or inactive.”
In other words, the dead do better in the stock market than the living, because the dead don’t always mess with their investment accounts the way the living do.
Now, the only problem with this wonderful story is that there is no evidence that it ever happened. Google results show a lot of stories about this supposed “study” – but no actual study.
It seems to be an urban legend on Wall Street. But hey, that doesn’t mean the point is still there. As most people will tell you, the most important things that run alongside any investor are time and patience. Attempting to time the market, panic buying or selling due to FOMO will never outweigh the returns on long-term investments.
So, real or not, these dead investors are onto something. Here are four things the dead can teach us about investing:
1. Buy and keep
Dead investors are the ultimate “buy and hold” investors – in this case, we mean they stay consistent. Dead people, as a rule, are really consistent in their behavior.
We asked Robin Hartill for some advice on the stock market. She is a certified financial planner and financial advisory columnist for The Penny Hoarder. She recommends budgeting a certain amount of money to invest each month, no matter what.
“The S&P 500 has delivered inflation-adjusted returns of about 7% per year on average for the past 50 years,” she said.
Not sure where to start? It’s easy to set up automatic transfers so you can invest regularly with an app called Stash. It allows you to choose from hundreds of stocks and funds to build your own investment portfolio. It makes it simple by dividing them into categories based on your personal goals.
2. Don’t try to time the market
The dead know better than anyone else: it is the passage of time that is most important. This is true when it comes to investing as well.
In other words, don’t try to time the market. It’s a fool’s job trying to predict the various booms and busts that the stock market will inevitably go through. Instead, start investing as soon as possible, and focus on the long-term.
“The timing of your investment is much less important than the amount of time you should invest,” Hartell says. “The cost of waiting for the perfect time to invest is high. You lose out on long-term growth.”
All the more reason to sign up for Stash, where you can start with as little as $1*
3. Get life insurance. Prices start at just $16 per month
There are two types of deceased investors: the dead who have life insurance policies to help loved ones they leave behind; And the dead who he wishes They had life insurance policies.
Have you thought about how to run your family without your income after you are gone? How will they pay the bills? Sending children through school? Now is the time to start planning for the future.
You might be thinking: I don’t have the time or money for that. But your application can take minutes — and you can leave your family running up to a million dollars with a company called Bestow.
Prices start at just $16 a month. Peace of mind knowing your family is being taken care of is invaluable.
If you are under 54 and want to get a quick quote on life insurance without a medical exam or even getting up from the couch, get a free quote from Bestow.
4. Don’t overthink things
Dead investors are great at not overthinking things. They just connect properly and do whatever they want without any fuss. This is why their portfolios are doing so well.
When it comes to investing, be like the dead. Don’t think about things.
Hartell’s tip: The stock market will make you money if you give it time, so it’s best to start sooner rather than later.
“If you were hoping to make a quick profit from the stock market, now might not be the time,” she says. But real investing is not about making a quick profit. It’s about growing your money over time.”
If you sign up for Stash now (it takes 2 minutes), Stash will give you $5 after adding $5 to your investment account. Subscription plans start at $1 per month. **
Mike Brasfield ([email protected]) is a featured writer for The Penny Hoarder. he did not die.
*For securities over $1,000, partial stock purchases start at $0.05.
** You will also be responsible for the standard fees and expenses that are reflected in the pricing of the ETFs in your account, as well as the fees for various additional services charged by Stash and the Custodian.