Volatility in the stock market is often spoken of as synonymous with risk. The idea is that making money by buying low and selling high is difficult to do because the stock market is always going up and down and who knows which way it will go next? But while it’s true that the stock market goes up and down all the time over the short term, it’s not true over the long term. Over a 20-year period, the Dow Jones stock index has never gone down. It’s true that past performance is no guarantee of future success but if you think the future will be like the past at least directionally, then it is not hard to buy low and sell high—you just have to buy an index fund and wait 20 years. This may not sound exciting, but it’s worth noting that it works.
Disclaimer: I am not a financial advisor. This is not advice. This is an observation. I do not own a Dow Jones Index fund, nor do I plan to purchase shares in a Dow Jones Index fund in the next 30 days.