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Risk and Return: Investing for the Long Term

Risk and return? Should we focus on the short-term or long-term? A Fiscal Investor will always practices discipline and patience!

As September comes to an end, it’s a good time to review your investment horizon. Currently, you can get over 5.5-6.0% return for taking almost no risk, while the average S&P 500 return over the last 30 years has been 10.7%, with more risk. The S&P 500 has lost around 1.77% for September so far.

While you can put your money in a virtually risk-free investment, some would argue that the S&P 500 will revert to the mean. A Fiscal Investor is always looking for the best opportunities with education, discipline, and patience. This is a good time to be finding some of the great opportunities out there.

There are many negatives in the market right now, such as strikes, government debt, inflation, and a crazy political environment. However, a Fiscal Investor knows that this is temporary. We will wake up at some point and all this will be over.

A Fiscal Investor should be positioned in positions that will grow at a rate higher than the mean. Reverting to the mean with a base hit seems crazy when we can hit a homerun. The pitch is right, are you buying the strongest stocks with great dividend or growth opportunities? This is the time to be position building.

All the issues will pass, but staying focused on the reality will pay off. I would ask how many of those bomb shelters from the COVID era were a beneficial investment? They seem crazy investments now, but many people thought it was the way to go.

The stock market is volatile, but it has historically trended upwards over the long term. Investors who focus on the long term and who invest in high-quality assets are more likely to be successful.

Right now, the stock market is facing a number of challenges, such as inflation, rising interest rates, and the war in Ukraine. However, these challenges are temporary, and the stock market is likely to recover eventually.

This is a good time for investors to be looking for opportunities. By investing in strong stocks with great dividend or growth opportunities, investors can position themselves for success over the long term.

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