Long-Term Investing Has Risk

Matt is worried about investing in the market because of volatility. Are there safer investments?

QUESTION: Matt on Twitter is worried about investing in the market because of volatility. Are there safer investments?

ANSWER: The market is volatile. It is not as volatile as some things. Usually, where money is to be made—long-term investing—there is some up and down and there’s not a guarantee. For instance, I buy real estate as well. Real estate does not have a guarantee. It’s not as volatile as the stock market, but it has no guarantee, and the last few years we did have that huge dip. It was probably one of the largest dips ever in real estate except for the Great Depression.

I do real estate and then I do mutual funds. One of the ways to smooth out the volatility of the market is called diversification where you don’t have all your money in one or two things. It’s spread out, and that’s why I recommend good growth stock mutual funds.