From Yahoo Finance: 2025-05-15 13:01:00

New and less experienced investors tend to react to stock market volatility by waiting or pulling out of the market, missing out on corrections and future gains. Finance experts caution against waiting for a “safe time,” as investing rarely offers certainty. Halt your investing based on fear could be costly.

Reacting to market changes based on herd behavior can lead to wealth-destroying mistakes in both bull and bear markets. Trying to time the market to get in or out before others is highly unlikely. Fear-based investing is emotional and reactive, usually driven by headlines rather than a strategic investment philosophy.

Missing out on the top 10 best days in the stock market over a 20-year period can cut returns by over 40%. Automated contributions and having a written plan can help automate contributions and remove emotions from the investing process. Establishing an investment policy statement can guide investment decisions and avoid herd behavior.

For most people, a simple investment strategy involving low-fee, diversified equity index funds and dollar-cost averaging is effective. Cash doesn’t earn much, and the stock market tends to go up over time, emphasizing the importance of compound interest. Time is key to building wealth through consistent investing.

Establishing an investment policy statement and following a simple investment strategy can help avoid herd behavior in investing. Having a written plan and consistently investing in low-fee, diversified equity index funds can lead to successful wealth-building over time. Time and compound interest play a crucial role in building wealth through investments.

Read more: Waiting To Invest Until the Market Feels Safe? That’s Just Fear Talking