Long Term Stock Wheat Ridge CO

Suppose the year is 1928, at the height of the 20s boom, and Great-Grandpa is considering how to save a spare $100 for his future great-grandchild (that's you). If he deposited it into a savings account at 4 percent interest, it was worth somewhere around $1,920 at the end of 2002 - but that's barely keeping pace with inflation.

The Power of the Stock Market

On the other hand, if he had put the same $100 into stocks mirroring the performance of the Standard & Poor's 500 Index, it would have been worth more than $81,000 at the end of 2002 (and that's without considering dividends!). That's no typo - just a great example of how investing in the stock market can work over a period of many years.

Of course, to get from A to B Great-Grandpa needed to weather the entire Great Depression, and several other major "corrections," without needing to liquidate his investment to pay for the groceries. And he also needed to do it without panicking, without losing faith in his long-term strategy.

Note: This hypothetical illustration represents past performance and is not a guarantee of future results. Investment experience will vary with stock selection and changing market conditions

That's often easier said than done since investment results cannot be predicted, particularly in the short-term. Experts try and try to divine where the market is headed in the next week, month or year, but they almost always come up short. And there's no guarantee about what returns the stock market will provide tomorrow, let alone the next decade. Nor is there any crystal ball that will tell you how much (or how little) of that return will be nibbled away by that hungry ogre called inflation....