This post first appeared on Forbes.
Intelligent stock market investing is not for gamblers. It’s for the wise and fearless investors who know that size matters and that life is not a race but a marathon. The age-old proof is that those who retire with wealth, health, and happiness spent a large percentage of their investment dollars in the stock market.
While history shows that stocks are a winning investment for wealth management portfolios, it takes resolve to stay invested. But when considering where to put hard-earned money, it helps to know you are buying ownership into massive companies with proven success. There is virtually no better way to grow your wealth consistently.
Here are five reasons for trusting the long-term viability of the stock market.
Massive Companies Are In The Stock Market
Publicly traded companies have a proven product and service, which is why they are successful. They tout a loyal customer base and a competitive edge that has allowed them to carve out a significant piece of their competitive niche.
Look at these company’s earning to see why size matters. Small-cap stocks have a market value of $300 million to $2 billion and represent the smallest companies in the stock market. Mid-cap companies are worth $2 billion to $10 billion, and large-cap companies are valued at more than $10 billion.
Smart People Lead The Stock Market Leaders
The most educated business minds are leading the companies that are stock market leaders. Putting your money in the hands of these ivy league graduates, Wharton MBA students, and well-established businessmen and women is intelligent investing.
The CEOs of these companies have a team of savvy executives with the best business acumen. And they all work with the singular goal to make money.
Laser Focus On Profit And Performance
The savvy leaders of publicly traded companies are focused on making us money – with the “us” being their shareholders. This singular vision means they will do whatever it takes to increase the company stock price. Often this means the ruthless firing or furloughing of people, freezing salaries, selling parts of the company, and buying other companies.
Performance is the critical factor for all divisions of these companies as the company leaders are also company shareholders. The CEO and executive team are evaluated solely on their ability to generate a profit year over year, quarter over quarter, so the company stock price increases. These individuals and their jobs are therefore only protected by the stock price and last quarter’s valuations.
Stock Market Players Want To Ensure Less Poverty
In 1990, roughly 2 billion people worldwide were living in extreme poverty. Today, there are approximately 500 million. While poverty is never good, the less impoverished, the more opportunity to sell products and services.
And what do publicly traded companies produce? These stock market leaders make goods or services. So, there is an altruistic component to ensuring that these companies stay around so that our world leaders help curtail poverty enabling these companies to make money.
The World Has More People And People Mean Money
In the year 2000, there were approximately 6.1 billion people on this planet. As of 2021, there are roughly 7.9 billion people. That growth ensures that a company selling a good or a service has a growing market of people to help increase its market share.
A publicly traded company that knows what percentage of the world uses one of its products or services. So, by simply relying on population growth, these companies maintain market share and therefore continue to perform well in the stock market and for their shareholders.
The Stock Market Grows Even During A Pandemic
Covid-19 hurt many industries and in every country. Still, in August 2021, the US stock market broke records with one of its strongest Augusts ever.
Last month the S&P 500 that tracks the performance of the top 500 large companies listed on the US stock exchange put the market on track for more closing highs in 2021 than any other previous year. And so far in 2021, the S&P hit 53 new record highs, beating a previous record from 1964.
Retirement Savings Are Safe When Invested In The Stock Market
Look no further than the stock market with the ever-present goal to retire in wealth, health, and happiness. Your financial planning partner is your trusted source for investing in the market and will allocate your retirement dollars accordingly.
The best retirement stocks will help generate a reliable income stream so that people may retire in the manner they desire. And it is critical to have a longstanding relationship with a wealth manager who knows what lifestyle you seek in retirement. Hence, they help to select the appropriate stocks in your portfolio.