The key to making money in stocks is remaining in the stock market; your length of “time in the market” is the best predictor of your total performance. Unfortunately, investors often move in and out of the stock market at the worst possible times, missing out on that annual return.
(First things first: You need a brokerage account to invest — and thus make money — in the stock market. If you don’t have one, here’s how to open one. It takes only 10 minutes to set up.)
More time equals more opportunity for your investments to go up. The best companies tend to increase their profits over time, and investors reward these greater earnings with a higher stock price. That higher price translates into a return for investors who own the stock.
More time in the market also allows you to collect dividends, if the company pays them. If you’re trading in and out of the market on a daily, weekly or monthly basis, you can kiss those dividends goodbye because you likely won’t own the stock at the critical points on the calendar to capture the payouts.
The Midway Team