Is investing in the stock market a good idea?
Based on several studies over the years the average individual investor does not come close to matching the average returns of the mutual funds they buy. Folks have a terrible habit of jumping in and out of funds based on recent performance. They would probably do better and have much less anxiety if they invested in bonds, or for the really risk averse, certificates of deposit. There is a significant inflation risk with low return portfolios, but the likelihood of a nominal return is high. If you have to see the value of your account balance go up at a steady pace, then a lower risk portfolio is probably for you. If you have a long term perspective, an understanding that stock markets ebb and flow, and a suitable temperament for risk versus return, then stock investing can add considerably to the long term performance of your portfolio. Past performance does not guarantee future results, but history shows it’s no contest when comparing the long term return of stocks to other investmen
