Part 8/10:
Investments in stocks and ETFs should ideally be held for at least 5 years. Historically, the longer the holding period, the better the chances of realizing positive returns, as short-term market fluctuations tend to even out.
Essential Rules for New Investors
Starting out with $10,000 or any sum requires discipline:
Avoid Knee-Jerk Reactions: The temptation to invest heavily in a trending stock or sector can backfire. Instead, prepare a list of desired stocks and buy gradually, waiting for better entry points.
Establish Emergency Funds: Before investing, ensure you have 6 to 12 months’ worth of emergency savings, adjustable based on personal circumstances. For retirees, a 5-year emergency fund provides extra security.