A simplified view of the stock market:
Instead of stock shares, think of it like buying a used car.
You buy a good used car for $10,000 and think what a great deal you got. Later that day, a stranger admires your car, but tells you the car is really only worth $5,000. You start to wonder about the deal you got.
A few days later, a family member notices a small bend and discoloration of the sheet metal. He suspects the car has been wrecked and that is why you got a good deal. It can't be worth more than $2,500.
The next week your work colleague goes to lunch with you and says your car is making a noise. You cannot hear a thing. Now you are worried about the sheet metal, the paint, the engine noise, and the future value of the car.
Your "friend" offers you $500 for the car. You worry that the car will soon be worthless, so you take the 500.
Ten years later, your "buddy" is still driving that same car.
Stock quotes go up and down, but you don't have to buy or sell at those prices. Dips in the market are usually short term. Much shorter than the bull market runs.
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Instead of stock shares, think of it like buying a used car.
You buy a good used car for $10,000 and think what a great deal you got. Later that day, a stranger admires your car, but tells you the car is really only worth $5,000. You start to wonder about the deal you got.
A few days later, a family member notices a small bend and discoloration of the sheet metal. He suspects the car has been wrecked and that is why you got a good deal. It can't be worth more than $2,500.
The next week your work colleague goes to lunch with you and says your car is making a noise. You cannot hear a thing. Now you are worried about the sheet metal, the paint, the engine noise, and the future value of the car.
Your "friend" offers you $500 for the car. You worry that the car will soon be worthless, so you take the 500.
Ten years later, your "buddy" is still driving that same car.
Stock quotes go up and down, but you don't have to buy or sell at those prices. Dips in the market are usually short term. Much shorter than the bull market runs.
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