I understand the money one commits to investing in equities, including the TheAnswerIs.ca Inc. Model Long-Term Investment portfolio (MLTIP), should remain invested for a minimum of 10 years, but preferably 20, 30 years or longer.
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Stock markets can be very volatile and have dropped by 20%-50% on several prior occasions. Usually stock markets recover these loses in 2-5 years, but sometimes it can take much longer. Therefore, a stock market investor should commit to leave the money invested in equities untouched for a minimum of 10 years, and preferably much longer.
The value of time is quite different in life than it is in investing:
In life, when we are young, we have a lot of time left, so we don’t value each individual unit of time very highly. This is quite rational. Economics 101 students will recognize that a huge supply of an item (i.e., time), reduces the unit value of that item. As we age into our 40s, 50s and beyond, people say time becomes more valuable, because we obviously have less of it. Again this is rational.
But in investing, the value of time works in reverse: time in and of itself is valuable. And in one of the quirks of economics, the more time you have (i.e., the younger you are), the more time is worth. This the opposite of how time is valued in life! This paradox of time must be understood and mastered so that you avoid falling into the Youth Trap, i.e., putting off investing today, because you will get to it tomorrow.