- Purchasing power
To maintain your power to purchase the same items in the future, your savings should generate returns that, at a minimum, can keep pace with inflation. Investing early can help.
- Power of Compounding
Compounding refers to the ability of an investment to generate earnings, which are then reinvested in order to generate their own earnings. This can make a huge difference in savings over the long term.
- Market timing
Many of the market’s most significant moves happen in short, unpredictable spurts. You could miss out on crucial gains, which typically come after dips in the market, by being on the sidelines for even a few days.
- Long-term growth
Negative events in the media may cause fear in investors who then stay on the sidelines at the expense of their long-term financial goals. Market volatility is normal and expected, but long-term growth can beat short-term fluctuations.