The stock market can be daunting at times, and if you’re nervous about investing, you’re not alone. Volatility can be unnerving, and amid concerns that a recession could be looming, many investors are concerned about buying stocks right now.
However, despite potential volatility over the coming weeks or months, it’s still possible to make a lot of money in the stock market — and it’s easier than you may think. With these three secrets, you could earn hundreds of thousands of dollars or more with little effort on your part.
1. Start investing early
Time is your most valuable resource when it comes to building wealth in the stock market. When you invest, you’re earning compounding returns — meaning your money will grow exponentially the longer you stay invested.
The earlier in life you begin investing, then, the more you can potentially earn. For example, say you’re investing $200 per month while earning an 8% average annual return. At that rate, you’d accumulate around $622,000 after 40 years.
If you’re off to a late start, that’s OK. Even if you don’t have several decades to invest, every year counts. By starting as soon as possible, it will be easier to maximize your earnings.
2. Don’t worry about downturns
When the market is volatile, it can be intimidating to invest. But investing is a long-term strategy, which means it doesn’t necessarily matter what the market is doing right now.
It’s true that this bear market may not be over, and stock prices could fall in the coming weeks or months. But historically, the market has recovered from every downturn it’s ever experienced. It’s almost guaranteed that it will rebound from any future slumps, too.
While market downturns can be difficult to stomach, they’re also temporary. Your best bet is to try to avoid getting caught up in the daily price fluctuations and continue investing like normal. Even if your portfolio takes a hit in the near term, it will rebound eventually.
3. Choose the right stocks
If you’re aiming to make as much money as possible in the stock market, it can be tempting to opt for high-risk, high-reward investments. However, these investments don’t always pay off, and it’s possible you could lose more than you gain.
A safer option, then, is to stick to slow-but-steady stocks. These investments won’t make you a millionaire overnight, but they are more likely to see consistent growth over time. The best long-term investments are the ones from companies with solid underlying business fundamentals, such as strong financials and a competent leadership team, for example.
If you prefer a low-maintenance approach to investing, an S&P 500 index fund could be a smart option. With this type of investment, you’re extremely likely to see positive average returns over time, but you don’t need to worry about researching companies or choosing individual stocks. All you have to do is invest consistently and leave your investments alone for as long as possible.
Despite short-term volatility, the stock market is a wealth-building powerhouse. You don’t need a lot of money to get started, but you do need a strategy. With the right approach, you can potentially make hundreds of thousands of dollars or more in the stock market while barely lifting a finger.
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