The financial markets are and have been arguably the greatest wealth creation tool ever. Over enough time, stocks, bonds and other assets have proven to do a very effective job at producing total returns that stay ahead of inflation and create financial independence for investors.
The problem is that most people don’t stick with it long enough to enjoy the benefits.
There’s no question that the attention spans of people have gotten shorter and the ability to stick with long-term plans & goals has gotten worse. Blame smartphones or overscheduling or whatever you want, people want things done quicker & quicker and they want results faster & faster.
To heck with 60 minute workouts. Now, there are people everywhere who tell you that you can get the same results in 10-15 minutes. Netflix drops entire seasons of shows on a single day because people can’t stand the turtle’s pace of one episode a week. You can listen to podcasts at 3x speed in order to get through them faster. Why cook a meal when you can throw something in the microwave and have it in two minutes?
The same thing happens in the financial markets. A few decades ago, it was all about long-term buy-and-hold investing. You’d buy a handful of big company stocks through your broker and then forget about them. Holding periods were measured in years and decades, not days. The biggest benefit of multi-year holding periods is they give investors the opportunity to ride out the short-term highs and lows in the pursuit of long-term capital growth. Today, with phones glued to their hands and an absolute overload of information available, people are reacting to everything in real time, often to the detriment of their own wealth creation.
A recent study found that the short-term attention span of humans has dropped by 30% in a little over a decade.
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